Multinational Cargill has reported a slight profit reduction on 8% higher revenues from its latest three month trading period, with a strong performance at its Animal Nutrition & Protein division.
The group made an adjusted operating earnings figure of $948m on revenues of $29.2 billion in the three months ended November 30th 2017, compared to $1.03bn and $26.9bn in Q2 2017. For the first half, adjusted operating earnings were $1.84bn on revenues of $56.5bn, from the $1.86bn and $54.0bn a year earlier.
The Animal Nutrition & Protein division was the largest contributor to earnings in the second quarter. Cargill says animal nutrition earnings rose across the global business, led by the premix and feed additive activities. Meat packing in North America decreased slightly against a strong comparative period, and the segment’s global poultry business trailed the year-ago quarter with good performance in parts of Southeast Asia offset by lower earnings elsewhere.
The period saw Cargill acquire animal micro-nutrition business Diamond V, a move which complements its recent partnership with Delacon, the Austrian business that makes natural, plant-based feed additives. “Both investments support the market shift toward sustainable, natural feed ingredients that improve animal health and embrace changing consumer values”.
Cargill has formed a joint venture with UK-based Faccenda Foods to serve the domestic food retail and foodservice market with fresh chicken, turkey and duck. It has also bought the Brazilian cattle feed producer Integral Animal Nutrition, a business that specialises in free-choice minerals for grazing cattle, and the full ownership of its premix joint venture in South Africa to increase its presence in that region where protein demand is growing.
The group’s Origination & Processing division suffered from another year of very large US corn and soyabean crops, adding to growing global stocks and diminishing volatility and trading opportunities. It is building a $90 million biodiesel facility in Kansas, its third such facility in the US. The new plant is set to open in early 2019, creating an additional market for US soyabeans.
“Even as conditions vary across our global markets, we continue to realize greater benefits from operating as an integrated company with a unique combination of talent, assets, insights and solutions,” said David MacLennan, Cargill’s chairman and chief executive officer.
“Thanks to the results of our recent strong performance, we are reinvesting more than $1bn in ways that enable our teams to achieve more for our customers and lead for growth.”