MINNEAPOLIS, MINNESOTA, U.S. — Cargill reported on Aug. 6 that earnings for the fiscal year dropped 13% to $1.58 billion from $1.82 billion a year ago, due to sluggish economies in many emerging markets where the company has heavily invested. Revenues decreased 11% to $120.4 billion. Cash flow from operations totaled $3.82 billion, up 1% from fiscal 2014.
The May 31, 2014 consolidated financial statements were revised to reflect the correction of an immaterial error in charges related to a Venezuelan currency devaluation that occurred in Cargill's fiscal 2014 fourth quarter.
For the fourth quarter of 2015, Cargill reported a net loss of $51 million, compared with earnings of $376 million in the same period a year ago. Fourth-quarter revenues were $28.4 billion, compared with $36.2 billion in the year-ago period.
“While several Cargill businesses generated very strong earnings in fiscal 2015, we lagged results from the prior year and did not meet our own expectations,” said David MacLennan, Cargill’s president and chief executive officer (CEO). “The economic environment remains sluggish in many emerging markets where we have invested significantly over the past several years. Even so, we aim for growth and profitability through these cycles. We are moving forward with good progress on changes begun last year to optimize the business portfolio, reduce costs and increase operational effectiveness.”
Animal Nutrition & Protein posted increased profits for the full fiscal year, with strong performances in global animal nutrition, Central American poultry, and U.S. pork, turkey and egg further processing. The segment executed extremely well, drawing on its global reach, diverse products and services, and lower feed input costs, Cargill said. Softer results in some animal protein businesses held fourth-quarter earnings below the year-ago level. The biggest factor was the North American market, where high cattle costs decreased beef’s competitiveness relative to other meats. In the fiscal 2016 first quarter, Cargill agreed to sell its U.S.-based pork business to JBS USA Pork for $1.45 billion, pending regulatory review and approval.
Full-year earnings in Origination & Processing were up slightly for the year; fourth- quarter results lagged the year-earlier period. Recent years’ record-large crops in the Americas have seen the rebuilding of global agricultural commodity stocks, which reduced price volatility and limited market opportunities for many of the segment’s businesses. The combination of a record U.S. soybean crop, limited supplies from South America and a strong export pull for most of the year boosted soybean crush volumes in North America, even in the typically slower fourth quarter. After months of unusually high grain-handling and export volumes in Canada, driven by the country’s very large 2013 and 2014 harvests, the segment’s grain origination returned to more normal levels in the fourth quarter.
Earnings in Food Ingredients & Applications trailed the prior-year period for both the fourth quarter and full year. Areas of continuing strong performance included Cargill’s salt operations, which met high demand for deicing products during a harsh northeastern winter in North America. Elsewhere in food ingredients, earnings lagged. The economic slowdown and excess industry capacity in emerging markets decreased results, as did rapidly evolving consumer preferences in developed economies. Comprehensive efforts are under way to improve profitability and reshape the portfolio for better performance.
The Industrial & Financial Services segment posted an upturn in the fourth quarter, though not for the full year. The energy businesses, especially petroleum, performed significantly better than a year ago in both periods – a function of last fiscal year’s restructuring and good positioning during calendar 2014’s sharp drop in crude oil prices.
MacLennan noted Cargill has experienced tremendous growth and success during its 150 years.
“Our company has a history of rising to challenges, and we continue to do so today,” he said. “We are focused on improving profitability and restoring growth, while fulfilling our commitment to helping customers thrive and feeding the world sustainably.”
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