Cargill revealed a further deterioration in its performance
in the March-to-May period – its worst quarter in at least a decade – as it
unveiled a drop in full-year profits to levels "below expectations" despite spending $4bn on acquisitions.
Greg Page, the Cargill chief executive, acknowledged that
the US agribusiness giant's performance in the year to May had not lived "up to
our expectations" as it unveiled a 56% tumble in earnings to $1.17bn.
The decline, despite a 12.1% rise to $133.9bn in revenues,
and acquisitions including feed group Provimi, reflected a slump in earnings in
the March-to-May period.
At $73m, earnings for the quarter were 82% down year on
year, and fell below the $100m in the September-to-November period which represented
the worst quarter since late 2001
'Did not trade as well'
Mr Page, while failing to detail reasons behind the
fourth-quarter decline, said that the full-year decline reflected it falling
short in its "long-standing strengths" in trading.
"We did not trade as well in this year's markets," a factor
reflecting their vulnerability to changes in political factors, such as twists
in the eurozone debt crisis, which were difficult to predict rather than crop
"Cyclical trends in the global soybean processing and North
American beef industries also were in play, decreasing margins in parts of
Cargill's oilseed processing and beef processing operations," Mr Page said.
The group - which last week backed calls for curbs on ethanol output to free up corn for livestock feeders - flagged earnings in animal protein operations "well
below last year's", as it, like other meat processors, found itself squeezed
between high cattle prices and a reluctance by retailers to pay up for beef.
In origination and processing results were "significantly
lower", in a year when elevated prices of crops such as soybeans and rapeseed
hurt oilseed crushers.
However, Cargill achieved improved results in its food ingredients
division, lifted by the robust margins for products such as starches, which were
highlighted last week by Ingredion, formerly Corn Products International, in
"Fourth-quarter food ingredients earnings were somewhat
lower than last year's level, but the group posted record earnings for the full
year, Cargill said, adding that "performance particularly strong in sweeteners,
starches, specialty oils and cocoa worldwide, and in staple foods in several
"We are confident about Cargill's ability to grow
profitably, to help our customers to do the same, and to help build a more
food-secure world," Mr Page said.