Cargill reports 41% decline in Q1 2014 earnings

Cargill, an American agricultural and industrial conglomerate, has reported a 41% decline in net earnings to $571m for the first quarter of 2014, compared with $975m for the same period a year ago.

The agribusiness firm attributed the decline in profit to weaker performances in its global grain trading and processing businesses due to last year’s US drought, which diminished harvests.

For the quarter ended 31 August, net revenues were $33.8bn, the same as the year before.

Cargill chairman and CEO Greg Page said, "Cargill did an excellent job managing the remaining effects of last year’s severe drought and smaller crops."

"Our agricultural supply chain and food ingredient businesses were focused on helping customers and the company to successfully manage their raw material purchases and inventories during the market uncertainty that precedes the transition to new crops in the northern hemisphere," he added.

The company noted that its Animal Nutrition & Protein unit posted slightly higher earnings over last year’s profits, driven by stronger margins and improvements in its US beef processing operations.

The Origination & Processing unit was the major contributor to Cargill’s first-quarter results.

The South American operations of the segment performed well, utilising the region’s big crops to serve strong export demand.

Cargill’s Food Ingredients & Applications unit, which operates mills that produce flour and corn syrup, recorded a moderate decrease in earnings as segment businesses closely managed the purchase and delivery of raw materials to processing facilities.

The Industrial & Financial Services business posted significantly lower results from a strong first quarter last year.

The company said it will continue to invest worldwide to cater to the rising expectations of customers and help them succeed in new and expanded markets, product and services.

---

Image: Cargill’s office in Wayzata, Minnesota. Photo courtesy of Cargill, Incorporated.