The Minneapolis headquartered agribusiness giant reported results for its fiscal 2020 first quarter ended August 31, 2019 yesterday [September 26].
Results declined for the company’s origination and processing businesses in most geographies, as trade- and weather-related disruptions continued to take a toll.
Overall, Cargill reported adjusted operating earnings of US$908 million for the quarter, up 3% from US$883m last year. Net earnings, on a US GAAP basis, were US$915m, a 10% decrease from last year’s strong comparative of US$1.02 billion, it added.
First-quarter revenues rose 1% to US$29bn, said Cargill.
Strong North American consumer demand for beef and eggs
The North American market performed well for its animal protein business, said the company, citing strong consumer demand for beef and eggs in that region.
Protein in Europe and Asia climbed due to good poultry performance in China, Thailand and the UK. Similarly, protein in Latin America improved despite a difficult operating environment, said Cargill.
Despite pressure from African Swine Fever (ASF), the company reported improved results for its global compound feeds operations, saying the business combined an advantageous product mix with effective cost management.
Its aqua feeds business also had “healthy” results with aquaculture’s high season falling during the reporting period.
“Our year started on a good note as we continued to help our customers navigate an unpredictable business environment,” said Dave MacLennan, Cargill’s chairman and chief executive officer. “Right now, we are focused on modernizing all aspects of our operations so we can effectively and efficiently provide our customers with solutions they value everywhere they do business.”
Earlier in the week, we reported on how Cargill has restructured its animal nutrition division, with a new name emphasizing its animal health focus, changes in leadership roles and realigned business units; the objective is to maintain the division’s double-digit growth.
“Over the past couple of decades, via our people, our approach and our strategy, we have had phenomenal growth and success, both organically and through acquisitions. We want to continue that growth in the future, [and in order to do so], we are realigning our organization,” said David Webster, the recently appointed president of the Cargill Animal Nutrition enterprise.
The realignment strategy for Cargill Animal Nutrition and Health sees Chuck Warta taking over as group leader of a new unit called Cargill Health Technologies. Warta previously ran the company’s premix and nutrition business; this new health technologies group comprises the company's Diamond V interests and its strategic investment in phytogenics producer, Delacon.
Adriano Marcon is now the group leader of Cargill Animal Nutrition. Previously heading up the aqua feed business, Marcon will lead the animal nutrition business, which mergers the complete feed and the premix businesses.
Pilar Cruz has been named group leader of the “high-growth” Cargill Aqua Nutrition business. She was previously running the Cargill feed and nutrition business.