MINNEAPOLIS — Strong contributions from the company’s holdings in The Mosaic Co. helped drive a 25% gain in earnings at Cargill in the second quarter. Net income in the second quarter ended Nov. 30 was $1.19 billion, up from $954 million in the same period a year ago. For the first half of fiscal 2009, earnings totaled $2.68 billion, up 43% from $1.87 billion in the first six months of fiscal 2008.
"Cargill performed solidly in a period like no other," said Greg Page, chairman and chief executive officer. "The global financial system was under significant stress, energy and agricultural commodity prices fell sharply, and recessionary risks took hold in developed economies in a worsening global economic environment. Because of Cargill’s focus on market fundamentals and risk management, we were able to work our way safely through exceedingly volatile conditions."
Cargill said results during the second quarter were led by its origination and processing segment as well as its industrial segment, both of which increased earnings significantly from the second quarter a year ago. Earnings in agriculture services, meanwhile, decreased moderately, while results declined overall in the food ingredients and applications segment despite some strong performance in individual food ingredient and meat units during the quarter. Results in the risk management and financial segment were lower.
During the second quarter, Cargill opened two major additions to its global processing capacity: a rapeseed crush facility in Montoir, France, and a cocoa processing plant in Tema, Ghana. The Montoir plant, a joint venture with a French cooperative, will draw primarily on locally grown rapeseed to produce a variety of oil- and meal-based products for the French food, animal nutrition and biodiesel industries. The cocoa processing plant in Ghana converts locally grown cocoa beans into high-quality cocoa liquor, butter and powders for customers globally. The facility employs about 200 and adds to the local economic base.
Looking ahead to the remainder of fiscal 2009, Mr. Page said Cargill will be even more mindful of costs and expenditures, and the risks it chooses to take.
"We do not expect Cargill to be immune from the economic challenges in this environment, but the essential nature of many of our products and services, the diversity of our businesses and our financial discipline should lend resilience to our operations," Mr. Page said. "We will keep our resources available to run the sourcing, processing, logistics, transport and risk management activities that support our customers’ supply chains and contribute to the world’s food security. We also will continue existing efforts to reduce our company’s energy and water usage, find new and better ways to manage waste, and protect the natural resources so vital to producing food for a still-growing world."