MINNEAPOLIS, MINNESOTA, U.S. — Weak economic conditions in some countries, exchange rates in Venezuela and the rejection of corn shipments in China all affected Cargill negatively in the fiscal year ended May 31. Fiscal-year earnings of $1.87 billion marked a 19% decrease from $2.31 billion in the previous fiscal year. Fiscal-year revenues dipped 1% to $134.9 billion.
“Though we look back on a year in which overall earnings fell short of expectations, we realized stronger operating results in several businesses, including a turnaround in our global beef operations,” said David MacLennan, president and chief executive officer of Minneapolis, Minnesota, U.S.-based Cargill, when results were given Aug. 7. “We also made good progress on moves designed to sharpen efficiency and support profitable growth in fiscal 2015 and beyond.”
The beef business led performance in animal protein, helping earnings rise in Animal Nutrition & Protein, one of Cargill’s four segments. Within that segment, U.S. pork operations rose on improved life production and processing efficiency and steady demand. Poultry operations in Central America, Europe and Thailand posted higher earnings.
Earnings in the Food Ingredients & Applications unit decreased after four straight years of record performance. The drop in earnings reflected weaker economic conditions in some countries and a negative impact of the change in Venezuela’s effective currency exchange rates.
China rejecting certain U.S. corn shipments, which Cargill reported in the third quarter, led to decreased earnings in Origination & Processing. Poor performance in energy led to declining results in Industrial & Financial Services. Within that segment, earnings rose in global transportation and a U.S.-based steelmaking joint venture.
In the fourth quarter ended May 31, Cargill’s net earnings of $424 million marked a 12% decrease from $483 million in the previous year’s fourth quarter. Fourth-quarter revenues rose 2% to $36.2 billion.
Cargill has $3.3 billion worth of food and agricultural facilities under construction in 13 countries, MacLennan said.
“As these facilities come on-line, they enhance Cargill’s delivery of value-creating solutions to our food, agricultural and other customers,” he said.
MacLennan said Cargill is making changes to better leverage and connect its operational efficiency, business capabilities and market insights. With respect to processes and technology, this includes accelerating the deployment of enterprise resource planning technology from SAP.
Cargill also has begun implementing a multiyear, shared-services approach to providing functional services to business units globally.
Selective changes were made to Cargill’s portfolio, including this year’s successful formation of Ardent Mills, a flour milling joint venture now poised to lead in innovative flour and grain products and services in North America. In its food segment, the company sold a highly specialized texturizing compounds business.
MacLennan noted that Cargill will celebrate its 150th year in business in 2015. “Our company has a long history of doing business ethically and safely, nurturing top talent, managing risk, learning from setbacks and breaking new ground. It makes us optimistic about our ability to excel, to help customers thrive and to be the global leader in nourishing people.”