USA, Minneapolis. Declining prices for commodities and weak demand in some markets weighed on Cargill’s earnings for the second quarter.
For the quarter ended 30 November 2015, the company reported operating earnings of $574 mill., a 13% decrease from $657 mill. in the same year-ago quarter. The results excluded gains from the sale of Cargill Pork for $1.45 bn. and the divestment of its 50% interest in a steel mill venture valued at $720 mill.
Revenues for the quarter retreated 10% to $27.3 bn. on lower commodity prices and weaker demand in some markets. First-half revenues totaled $54.8 bn.
Stronger results in animal nutrition offset declines in the company protein business. Still adjusted operating earnings in Animal Nutrition & Protein division decreased slightly during the quarter. Segment earnings were pressured by “difficult economic conditions” in North American cattle feeding and declines in Australia’s cattle supplies.
Adjusted operating earnings for the Origination & Processing segment declined moderately from last year’s level, the company said, while performance of Food Ingredients & Applications slipped below a year ago. Cargill noted the company made good progress toward strengthening operational and commercial execution.
Cargill reported significant declines in adjusted operating earnings in its Industrial & Financial Services segment. The company attributed the declines in part to the liquidation of certain hedge funds at an asset management subsidiary.
David MacLennan, chairman and CEO of Cargill, noted significant progress in reshaping Cargill’s portfolio. For example, the company is seeing benefits from the integration of ADM’s chocolate operations. Also, the addition of EWOS, a leading global salmon feed producer, brings the potential of new markets and expertise in nutrition for cold-water species.