Cargill today reported net earnings of $1.19 billion in the 2009 second quarter ended Nov. 30, up 25 percent from $954 million in the same period a year ago. In the first six months, the company earned $2.68 billion, up 43 percent from $1.87 billion a year ago. As in recent past quarters, Cargill's investment in the fertilizer industry through its holdings in The Mosaic Company was a significant contributor to company results. Excluding earnings from that investment, Cargill's second-quarter results were moderately below the year-ago level and, in the first half, just under the same period a year ago.
"Cargill performed solidly in a period like no other," said Greg Page, Cargill chairman and chief executive officer. "The global financial system was under significant stress, energy and agricultural commodity prices fell sharply, and recessionary risks took hold in developed economies in a worsening global economic environment. Because of Cargill's focus on market fundamentals and risk management, we were able to work our way safely through exceedingly volatile conditions." Page said the company's strong balance sheet allowed uninterrupted access to short-term credit markets. "Based on these strengths, we remained a reliable supplier and solid supporter of our customers' businesses."
Among Cargill's five business segments, results in the second quarter were led by its origination and processing segment and by its industrial segment, both of which increased earnings significantly from the second quarter a year ago. Earnings in agriculture services decreased moderately. Results declined overall in the food ingredients and applications segment, with steady or improved performance in some food ingredient and meat units offset by weaker performance elsewhere. The risk management and financial segment incurred a loss related to financial markets activities; at the same time, the segment's energy businesses jointly surpassed last year's second-quarter earnings by a significant margin.
During the second quarter, Cargill opened two major additions to its global processing capacity: a rapeseed crush facility in Montoir, France, and a cocoa processing plant in Tema, Ghana. The Montoir plant, a joint venture with a French cooperative, will draw primarily on locally grown rapeseed to produce a variety of oil- and meal-based products for the French food, animal nutrition and biodiesel industries. The cocoa processing plant in Ghana converts locally grown cocoa beans into high-quality cocoa liquor, butter and powders for customers globally. The facility employs about 200 and adds to the local economic base.
During the second quarter, Cargill businesses were awarded two important recognitions. Cargill Corn Milling North America received the 2008 Malcolm Baldrige National Quality Award, the United States' highest honor for organizational innovation and performance excellence. The award marks the third time a Cargill business has received a Baldrige award.
Cargill China received the U.S. Secretary of State's 2008 Award for Corporate Excellence in recognition of its public-private partnership efforts in China to prevent the spread of disease, foster environmental stewardship, contribute to disaster relief, implement innovative food safety training programs and demonstrate volunteerism.
Page said Cargill is preparing for the year ahead by being even more mindful of costs and expenditures, and the risks it chooses to take. "We do not expect Cargill to be immune from the economic challenges in this environment, but the essential nature of many of our products and services, the diversity of our businesses and our financial discipline should lend resilience to our operations," said Page. "We will keep our resources available to run the sourcing, processing, logistics, transport and risk management activities that support our customers' supply chains and contribute to the world's food security. We also will continue existing efforts to reduce our company's energy and water usage, find new and better ways to manage waste, and protect the natural resources so vital to producing food for a still-growing world."
Cargill is an international provider of food, agricultural and risk management products and services. With 160,000 employees in 67 countries, the company is committed to using its knowledge and experience to collaborate with customers to help them succeed. For more information, visit http://www.cargill.com.