The rebound in Cargill's earnings slowed, albeit to a healthy 30%, as the agricultural commodities giant showed it was not untouchable by high and volatile crop prices.
The US-based group - who operations stretch from chicken processing to ethanol refining, and which employs more than 130,000 people in 66 countries – said its earnings excluding the Mosaic fertilizer business, which it is spinning-off, hit $763m in the December-to-February period.
The result, on revenues up 21% to $30.5bn, was an improvement, compared with $588m a year before.
However, it was lower than the $832m in the previous quarter, and represented the slowest rate of profits increase since Cargill began, early last year, to recover in earnest from the global economic downturn.
'Dramatic impacts'
The group, which is privately held, did not reveal detailed figures of its performance.
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Cargill earnings, and change on year
Q3 2011: $763m, +30%
Q2 2011: $832, +98%
Q1 2011: $693, +51%
Q4 2010: $433, +87%
Q3 2010: $588m, "nearly double"
Data for Cargill's fiscal quarters |
But it said that its food ingredients division reported a "modest" increase in profits, helped by efficiency drives in the face of higher raw material costs.
The agriculture services arm - which provides services such as the crop marketing and risk management, and includes the AgHorizons business in the US and the UK-based Frontier Agriculture trading joint venture with Associated British Foods – reported "slightly" lower profits.
"All of us in agriculture are living with high levels of price volatility, in which small changes in the quantity of production are having dramatic impacts on price," Greg Page, the Cargill chairman and chief executive, said.
Mosaic deal
The rise to what Mr Page termed "solid" group earnings was led by the origination and processing unit, whose operations include cotton businesses in Tenessee and the UK city of Liverpool, ocean freight and logistics units, and the Cargill Sugar sugar trader and processor.
The unit "used its global sourcing and risk management capabilities to fulfil customers' supply needs in spite of market disruptions", Cargill said.
The results may be the last before the group closes the spin-off of its 64% stake in Mosaic, the world's largest phosphate fertilizer company, to its shareholders and debt holders.
The deal, over which Mosaic investors are due to meet on May 11, is expected to close within the April-to-June period.
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