Adjusted operating earnings in the first quarter ending 31 August 2015 were $611m, compared with $619 million in the same period a year ago, while net earnings were $512m, the Minnesota based agribusiness group said on Wednesday, releasing its Q1 results for its 2016 fiscal year.
It also confirmed revenues for the quarter as having slipped 17% from to $33.3bn a year ago to $27.5 bn.
Cargill said its global animal nutrition earnings performed strongly, exceeding last year’s Q1 due to what it said were higher sales volumes and good cost management. “Areas of particular strength included the US and Vietnam, and aquaculture nutrition in Latin America,” added the company.
Combined results for the grain and oilseed supply chain businesses rose “considerably”, based on what the group referred to as “effective positioning in agricultural commodity markets distinguished by persistent downward trends and occasional sharp price reversals.”
And it said its soybean crush results strengthened globally, boosted by improved capacity utilization in South America and an unusually long processing season in North America.
But “performance in North American farm services lagged last year’s strong first quarter, reflecting a return to more normalized levels in Canada after two very large crop years,” said the trader.
David MacLennan, Cargill CEO, said it “ably navigated the quarter’s weather-driven agricultural commodity markets, as well as the effects of more volatile emerging markets, currency fluctuations and other macroeconomic uncertainty.”
The segment’s animal protein businesses, poultry results in Central America, Europe and the US rose on strong operational and marketing performance.
However, Cargill said unseasonable pressures in cattle and beef markets led to a weaker quarter in North American beef. “Cattle costs remained high, and continued high beef prices caused consumers to seek less expensive alternatives such as pork and poultry,” said the firm.
Cargill competitor, Louis Dreyfus, recently reported a 50% fall in first-half profit due to falling commodity prices and economic challenges in significant markets such as China and Brazil. On 29 September, it revealed its consolidated net profit, group share, fell to $130m from $260m in the first half of last year, while net sales dropped to $26.4bn from $33.7bn.
All eyes are trained on ADM and Bunge as they prepare to release financial results in the coming weeks.