Cargill food ingredients lag strong overall results
year earnings, although the performance of the firm's food
ingredients business lagged the year-ago level.
The agribusiness giant also saw its fourth quarter earnings hit by a $190m restructuring charge for the recently formed Mosaic Company, a fertilizer company based in Minneapolis, of which Cargill is the majority shareholder.
This brought the firm's fourth quarter net earnings down to $168m, compared to $230m in the same period last year.
But last year, the company also saw its earnings boosted by a $578m noncash net gain related to the formation of Mosaic. So excluding the special items in both years, Cargill earned a "record" $1.73bn in fiscal 2006, up 13 percent from $1.53bn a year ago.
"We are delighted to report earnings of $1.73bn, which marks the company's fifth consecutive year of improved performance," said Warren Staley, Cargill chairman and chief executive officer.
"Our results show the strength of Cargill's strategy, diversification and global presence working in tandem. We've become more adept at collaborating with customers to create solutions that help them succeed. The diversity within our business and geographic mix enabled us to benefit from good economic growth in much of the world. Our team also did a good job managing the market volatility that accompanied the growth," he added.
The company's revenues for the full year rose 6 percent to $75.2bn. Cash flow from operations increased 4 percent to $3.3bn.
However, Cargill said its food ingredients and applications segment lagged the year-ago level, but added that earnings advanced in several of its edible oils, sweeteners, meat and poultry businesses around the world.
And the firm has also made significant investments in food ingredients over the past year. These included Degussa's food ingredients operations, which specialize in texturizers and flavor systems for the food and beverage industry; the joint-venture purchase of oil palm plantations in Indonesia and Papua New Guinea; and the purchase of beef processing businesses in the United States and Canada.
Expansions announced or under way included growth in animal nutrition, cocoa processing and oilseed processing.
Although earnings in the 2006 fiscal year were led by Cargill's risk management and financial segment, the company said its origination and processing segment, which comprises its global supply chain in grains, oilseeds, sugar and other agricultural commodities, also saw increased earnings from a year ago. Results in agriculture services also were improved.