Ag services bolster Cargill earnings


MINNEAPOLIS — Cargill reported $404 million in earnings in the fiscal 2011 fourth quarter ended May 31, a 7 percent decrease from $435 million in the same period a year ago.

For the full fiscal year, earnings from continuing operations totaled $2.69 billion, a 35 percent increase from $1.99 billion in the prior fiscal year, according to the company’s report released Aug. 9.

The company recorded an additional $359 million in the fourth quarter from discontinued operations — income attributable to Cargill’s former majority investment in The Mosaic Company.

For the full fiscal year, income from discontinued operations was $1.55 billion. Cargill also recognized a one-time accounting gain of $11.49 billion on the May 25, 2011, distribution of its Mosaic shares, which were exchanged for Cargill stock and Cargill debt.

Fourth quarter consolidated revenues were $34.8 billion, a 32 percent increase from $26.3 billion in the year-ago period. Full-year consolidated revenues were $119.5 billion, up 18 percent from $101.3 billion in the prior year. Cash flow from operations was $4.6 billion compared with last year’s $3.3 billion.

Processing remains strong. Three of Cargill’s five business segments increased earnings in the fourth quarter. Four of the five improved results in the full year.

Origination and processing led Cargill’s fiscal 2011 earnings, with results up for the quarter and the year.

Despite a softer fourth quarter, the food ingredients and applications segment increased earnings from the year-ago period. The diverse segment, which includes about 40 business units, benefited variably from a mix of factors including higher sales volumes, effective risk management, improved yields and more value-added offerings.

Agriculture services posted a strong fourth quarter and year, and industrial earnings also rose in the fourth quarter and full year.


During fiscal 2011, Cargill invested more than $3 billion in acquisitions and new or expanded facilities. The company acquired the AWB commodity management business in Australia, Unilever’s shelf-stable condiments business in Brazil, Indonesian starch and sweetener maker PT Sorini Agro Asia Corporindo Tbk, Royal Nedalco’s potable alcohol operations in Europe, a Chinese port facility, a Canadian grain facility and a U.S. corn wet mill ethanol facility.

Cargill also is building new or expanded plants in several countries, including animal feed mills in Russia and Vietnam, poultry processing operations in Thailand, a sweetener facility in China and food innovation centers in Brazil and the United States.

Mosaic divestiture

On May 25, 2011, Cargill and The Mosaic Company completed the closing of the transaction in which Cargill divested its approximately 64 percent stake in Mosaic by exchanging approximately 286 million Mosaic shares for Cargill stock held by the company’s family shareholders, including the Margaret A. Cargill charitable trusts, and for Cargill debt held by third parties.

Although no longer a shareholder of Mosaic, Cargill continues to be a customer of Mosaic.

In the first few months of fiscal 2012, Cargill completed the purchase of German cocoa and chocolate company Schwartauer Werke Kakao Verarbeitung Berlin (KVB), Central American poultry and meat processor Corporacion Pipasa, and Italian animal nutrition company Raggio di Sole Mangimi. In May, Cargill’s Australian beef operations agreed to form a joint venture with Australian beef processing company Teys Bros. Cargill and the USJ Group announced an agreement in June to establish a Brazil-based sugar, ethanol and bioelectricity joint venture.

Both agreements are subject to regulatory approval.


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