Cargill points to animal nutrition for Q2 boost
The Minnesota-based agri-giant released its Q2 and half-year results for the period that ended November 30 on Tuesday.
Overall, the adjusted operating earnings for its second quarter saw an 80% improvement from the previous year - coming in at $1.03bn, compared with the $574m accrued in the same period, a year earlier.
For the half year results, earnings stood at $1.86bn, up 57% over last year.
“Our increased profitability gives us confidence that we are achieving the broad-based structural improvements we have sought,” said David MacLennan, Cargill’s chairman and chief executive officer. He added that the results were “energizing.”
However, net earnings for Q2 were $986m, a decline of 29% from the $1.39bn generated a year ago when Cargill realized large gains from business divestitures. And net-earnings for the first half were down by 3% to $1.84bn, with the company citing the same reason for the drop.
Revenues were $26.9bn for Q2 and $54bn for the first half of the year - a decline of 1% for both periods from the equivalent Q2 and half year income a year earlier.
Feed crop, animal nutrition details
The animal nutrition and protein segment saw an improvement in results from Q2 of the previous year, said Cargill. It had the largest influence on the growth in adjusted operating earnings for Q2, added the agribusiness group.
A more normal cattle supply along with streamlined production and consistent consumer demand helped beef results improve from last year.
Global poultry business improved from last year, based in part on results from Asia, the company said. Egg sales also remained strong.
Origination and processing also saw an uptick in earnings, even against a strong period, said Cargill. North American sales supported that result.
US corn and soybean crops saw sustained demand from both domestic and international livestock industries and the reduction in export competition from South America.
The company saw volumes increase for grain origination, oilseed crush and exports in the US and Canada, it said. And, terminals in the US Gulf and Vancouver ran at capacity.
Other quarter events
On the animal nutrition side, the second quarter of the year saw the launch of a new shrimp feed designed to be used with automated feeders and acoustic technology, said Cargill.
The company also announced its plans to work with Calysta and other investors to build a gas fermentation facility in Tennessee that is set to produce a novel protein for fish and livestock feed and act as a potential sustainable replacement for fishmeal.
We reported on it at the time. That facility is expected to come online in 2018, it added.
The company also opened several new innovation centers, including one with EWOS in Chile that is focused on fish health, nutrition and disease prevention, it said. Two others in Plymouth, Minnesota in Shanghai, China are focused on food research.
