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Cargill Reports on Q2 of 2019.

01/03/2019

On January 3rd. Cargill Inc. a family-held multinational agribusiness enterprise reported results for the Second Quarter of Fiscal 2019 ended November 30th 2018. The report highlighted:-

 

 

 

 

 

  • Second-quarter revenues decreased four percent to $28 billion.

  • Adjusted operating earnings were $853 million, down ten percent from the $948 million earned during the comparative period in FY 2018.

  • Net earnings on a U.S. GAAP basis for the quarter were $741 million, a twenty percent decline from $924 million in Q2, FY 2018.

In commenting on results David MacLennan, Chairman and CEO stated "Our teams executed in a world of uncertainty to bring the best solutions to our customers and the consumers they serve," He noted the ability of Cargill to adjust rapidly to changing market conditions throughout the quarter and to deliver safe, reliable and sustainably- produced foods to their destinations.

The Animal Nutrition and Protein Segment was the largest contributor to Cargill's adjusted operating earnings, with results just below last year's strong comparative quarter. Performance in North American protein moved higher. Demand for egg products drove protein earnings. Heavy demand for beef and large supplies of cattle increased beef production and sales to domestic and export markets.

Continued political instability in Central America and market challenges in Southeast Asia impacted results in the global poultry business. Earnings from animal nutrition trailed the prior year due to adverse market conditions in several regions. Challenges included lower hog volumes in China and Vietnam, and unfavorable dairy and poultry prices in the U.S.

Cargill expanded in Colombia with the acquisition of Campollo, one of the country's leading makers of chicken and protein products. The deal complemented the purchase of Colombia-based Pollos El Bucanero in FY 2018 and advanced the segment's strategy to serve growing protein demand in emerging markets with poultry products.

Results from the Food Ingredients and Applications Segment declined on mixed results across areas of operation.

The Origination & Processing Segment posted increased earnings through leveraging the Cargill global network to move commodities among agricultural markets disrupted by tariffs and embargos. Oilseed processing remained strong in North America and Europe, supported by growing protein consumption that increased global demand for soybean meal for livestock feeds.

Cargill announced two new projects to digitalize the agricultural supply chain to the benefit of farmers and end-users. In collaboration with Archer Daniels Midland, Cargill agreed to form Grainbridge, a technology joint venture that will provide software to support North American farmers to market grains, for E-commerce and account management. The venture will consolidate information on production and grain marketing into a single digital platform for farmers at no cost.

Cargill also announced collaboration with ADM, Bunge and Louis Dreyfus to investigate ways to standardize and digitalize global agricultural shipping transactions, leveraging technology to the benefit of the entire industry. This will reduce time- and resource-intensive processes, lowering costs and increasing transparency for customers in supply chains. In late December, COFCO International, a quasi-government entity established by China, joined the initiative. The cooperating companies are pursuing broad-based industry participation to promote global access and adoption.