Global agribusiness giant Cargill reported a 20% fall in net earnings in its 2019 second quarter with oilseeds its only business sector to enjoy a strong result.
For its second fiscal quarter ending 30 November, Cargill reported net earnings of US$741M, a 20% decline from US$924M a year ago, while operating earnings were down 10%, from US$948M to US$853M. Second-quarter revenues fell 4% to US$28M, bringing the year-to-date figure to US$56.7bn.
“Our teams executed in a world of uncertainty to bring the best solutions to our customers and the consumers they serve,” said Dave MacLennan, Cargill’s chairman and chief executive officer.
Earnings in the Origination & Processing sector rose with oilseed processing staying strong in North America and Europe, bolstered by growing protein consumption that drove global demand for soyabean meal for livestock feeds.
“Grain exports from the USA and Canada, and biodiesel production in Europe, also contributed to the strong quarter. Better-than-anticipated crops in Argentina supported a gain for the segment in South America.”
In Cargill’s other business sectors, continued political instability in Central America and market challenges in Southeast Asia reduced results in global poultry and the Animal Nutrition and Protein segment.
Starches and sweeteners earnings decreased on historically low ethanol prices in North America and higher energy and raw material costs in Europe in Food Ingredients & Applications.
“Industrial & Financial Services trailed the year-ago quarter, due in part to broader weakness in financial markets that negatively affected Cargill’s investments in managed funds. The ocean transportation business lagged last year as freight markets declined sharply in response to weakening macroeconomic sentiment, the uncertain effects of trade conflict on commodity flows, and the hesitance of third-party charterers to contract vessels ahead of the implementation of new international rules on sulphur dioxide emissions.”