Minneapolis, 13 Oct, 2008 - Cargill today reported net earnings of $1.49 billion in the 2009 first quarter ended Aug. 31, up 62 percent from $917 million in the same period a year ago.
“Cargill realized a strong start to our new fiscal year in a continuing environment of outsized volatility in agricultural and energy markets and severe turbulence in financial markets,” said Greg Page, Cargill chairman and chief executive officer. “Our team’s attention to measuring and managing risk, and exercising fiscal discipline allowed the company to respond to supply-and-demand fundamentals in fast-moving markets.”
Page said Cargill’s first-quarter results also received a substantial boost from its investment in the fertilizer industry through its holdings in The Mosaic Company.
Among Cargill’s five business segments, the increase in first-quarter earnings was led by the industrial segment, which reflected continued demand for crop nutrients in response to the world’s increased need for higher crop yields.
The origination and processing segment also was up significantly from the first quarter a year ago. It sources, processes and distributes agricultural commodities and provides supply chain and risk management services to customers globally. Earnings in agriculture services were down slightly, largely due to asset sales that occurred in last year’s first quarter.
The food ingredients and applications segment also declined slightly, due in part to higher raw material and energy costs among some of its units, as well as the temporary shutdown of Cargill’s corn processing plant in Cedar Rapids, Iowa, due to the U.S. Midwest floods in early June. The risk management and financial segment was below the year-ago level, though strong performances were posted by its energy, financial services and risk management units, which reflected the segment’s diversification.
Cargill opened several new facilities in the first quarter, including an addition to its ethanol production capacity at the Blair, Neb., corn processing complex, and a new, frozen beef patty production facility in Fresno, Calif. The company’s corn wet milling plant in Cedar Rapids, Iowa, which was damaged significantly by the flooding of the Cedar River in early June, has been rebuilt, with all operations slated to be fully functional in November. The facility produces corn syrup, specialty food starches and industrial starches for customers largely in North America.