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Ho Chi Minh City, Vietnam
The North American agricultural commodities multinational has reported its results for the second quarter of 2018 and first half ended November 30, 2017. New investments include the acquisition of Brazilian cattle feed producer, Integral Animal Nutrition.
Adjusted operating earnings totalled US$948 million, an -8% drop against last year’s strong comparative of US$1.03 billion, according to Cargill. For the first half, adjusted operating earnings stood at US$1.84 billion, down -1% year-on-year. Net earnings for the second quarter on a U.S. GAAP basis were US$924 million, down -6% from US$986 million a year ago, while first-half net earnings increased +3% to US$1.9 billion. Second quarter revenues rose +8% to US$29.2 billion, bringing the year-to-date figure to US$56.5 billion.
During the quarter, the company announced more than US$1 billion in agreed acquisitions, joint ventures and new investments in facilities. “Thanks to the results of our recent strong performance, we are reinvesting in ways that enable our teams to achieve more for our customers and lead for growth”. said David MacLennan, Chairman and CEO, Cargill.
Adjusted operating earnings in the Animal Nutrition & Protein segment are reported to have narrowly exceeded last year’s strong Q2; earnings rose across the global business, with improvement led by premix and feed additives. Protein results in North America decreased slightly against a strong comparative period. As cattle costs moved up, retail demand for beef remained brisk, as did exports of U.S. beef, says the report.
Cargill completed several acquisitions in December that expand its focus on animal micro-nutrition, including Cedar Rapids, Iowa-based Diamond V, a developer and manufacturer of natural feed additives, known as microbials, which improve animal health and performance by optimising digestive function and immune strength. The acquisition is said to complements Cargill’s recently formed partnership with Austria’s Delacon, a leading maker of natural, plant-based feed additives. Both investments support the market shift toward sustainable, natural feed ingredients that improve animal health and embrace changing consumer values.
The company also acquired Brazilian cattle feed producer Integral Animal Nutrition that specialises in free-choice minerals that help grazing cattle meet their nutritional needs. Cargill also purchased full ownership of its premix joint venture in South Africa, hence, increasing the company’s presence in a region where protein demand is reported to be growing.
In Canada, Cargill says it is launching a pilot to trace and verify a fully certified beef supply chain that meets the criteria for the Canadian Roundtable for Sustainable Beef. Through the program, customers are to receive fully audited beef, while farmers and ranchers will earn a financial credit for participating.
“We are building businesses today that will provide our customers and consumers with the products and solutions they are seeking tomorrow”, said MacLennan. “We are thinking differently about how to create positive impact and increase consumer trust.”