RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Cargill unveils first loss in 14 years

Twitter Linkedin

David MacLennan, the Cargill chief executive, said that the agribusiness giant was "focused on improving profitability" after a technological hiccup and Venezuela's currency crash landed the group its first loss in 14 years.

Cargill followed up announcements by rivals Archer Daniels Midland and Bunge of below-forecast profits by revealing that it had fallen into the red in the March-to-May period for the first time since the same quarter of 2001.

The loss this time, of $51m, compared with $87m in 2001, reflected charges "related to the company's enterprise resource planning system", with the group writing-off part of an SAP technology system after finding it did not meet their needs.

The group also flagged "an additional charge related to Venezuela's currency", the bolivar, which on the black market has plunged by some 90% over the past year, undermine by knock-on effects of factors such as lower oil prices and of controls on official exchange rates.

The group also revealed it had revised down its earnings for last year's March-to-May period, the fourth quarter of Cargill's fiscal year, to $376m, from $424m, thanks to revised Venezuelan currency calculations.

'Did not meet expectations'

Mr MacLennan highlighted that all four of the company's business divisions ran in the black in the latest quarter - although only one, industrial and financial services, managed to increase profits, helped by a savvy positioning in the oil markets.

Indeed, over the fiscal year to the end of May, "while several Cargill businesses generated very strong earnings… we lagged results from the prior year and did not meet our own expectations," he said.

He highlighted the setback from "sluggish" economic growth in many of the emerging markets in which the group has "invested significantly over the past several years.

"Even so, we aim for growth and profitability through these cycles.

"We are focused on improving profitability and restoring growth," Mr MacLennan said, highlighting that the group has made "good progress" on measures to cut costs and reshape its portfolio.

'Reduced price volatility'

The group highlighted emerging market dynamics in depressing fourth-quarter profits at the food ingredients division, which saw a "successful first year of operation" for the Ardent Mills flour--milling joint venture with CHS and ConAgra Foods.

In origination and processing, Cargill flagged setbacks from slow farmer selling in Argentina and Brazil, and the armed occupation of its sunflower seed processing plant in Ukraine, besides "reduced price volatility" which constrained trading profits.

However, in a drop in profits in the animal nutrition and protein division, Cargill highlighted the setbacks to US beef market conditions noted by Tyson Foods earlier this week

"The biggest factor was the North American market, where high cattle costs decreased beef's competitiveness relative to other meats," the group said.

By Agrimoney.com

Twitter Linkedin
Related Stories

Festive staff shortages 'likely' as British growers cut ties with UK supermarkets

Faced with mounting concerns over labour shortages and fears they may not be able to fulfil retailer contracts, some British growers have sought to cut ties with UK supermarkets in favour of companies elsewhere in Europe.

Hard Brexit to have 'catastrophic' effect on European meat industry; new report

A hard Brexit will have a ‘catastrophic impact’ on the European meat industry, according to a report published by Europe’s meat industry body, UECBV, as the UK and EU continue negotiations.

Manufacturers stockpile agrochemicals in bid to keep post-Brexit prices down for farmers

Manufacturers of crop protection products are stockpiling agrochemicals in warehouses in a bid to keep input costs down for farmers after Brexit, according to the chief executive of the Crop Protection Association, Sarah Mukherjee.

Dairy groups sidestep shockwaves from GDT price slump

Indeed, shares in the likes of A2 and Beston soar. Still, that does not mean there are no losers from the dairy price falls...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069