Despite a “broad” increase in earning from its Food Ingredients & Applications segment, global consumer goods firm Cargill reported a decrease in its earnings for the second quarter (Q2) of 2018.
Cargill’s adjusted operating earnings in Q2 were down 8% at US$948M from last year’s US$1.03bn, while net earnings decreased 6% from US$986M to US$924M, the company said in a 3 January statement.
In Food Ingredients & Applications, the firm said most of its food ingredient businesses posted “good gains” for the quarter, with cocoa and chocolate products, malts, and sweeteners and starches leading the results in most regions.
The company’s Asia-based food ingredient businesses also contributed strongly to the quarter, it said.
The Origination & Processing segment was down moderately from Q2 2017 due to the continuing large harvests of corn and soyabean in the USA adding to the build-up of global stocks.
“Although global demand continues to grow, today’s abundant supplies have weighed on markets, diminishing volatility and trading opportunities. Even so, trading performance in North America was ahead of last year, as was oilseed processing in Asia,” Cargill said.
Within the segment, the firm intended to focus on deploying technologies that would better connect its global operation, enhance trading and increase supply chain sustainability, which it was supporting with “selective investments” in new facilities.
As an example of such investments, Cargill in late September 2017 began a US$90M conversion of its Wichita, USA, edible oil facility into a biodiesel plant that was scheduled to come online in early 2019.
David McLennan, Cargill chair and CEO, said the company announced more than US$1bn in agreed acquisitions, joint ventures and investments in new facilities in Q2 2018.
“Thank to the results of our strong recent performance, we are reinvesting in ways that enable our teams to achieve more for our customers and lead for growth,” McLennan said.
In other segments, Cargill said its Animal Nutrition & Protein and Industrial & Financing Services businesses both slightly exceeded their Q2 2017 results.