Cargill Fiscal 2018 second-quarter results
David MacLennan, Cargill’s chairman and chief executive officer noted that during the quarter, the company announced more than $1 bn. 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.” he added.
Adjusted operating earnings in Animal Nutrition & Protein narrowly exceeded last year’s strong second quarter. Animal nutrition 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 US beef. Pre-season marketing by the US turkey business drove whole-bird sales in advance of the Thanksgiving holiday. The segment’s global poultry business trailed the year-ago quarter, as good performance in parts of Southeast Asia was offset by softer earnings elsewhere. In total, Animal Nutrition & Protein was the largest contributor to adjusted operating earnings in the second period.
Cargill completed several acquisitions in December that expand its focus on animal micro-nutrition. It purchased Cedar Rapids, Iowa-based Diamond V, a developer and manufacturer of natural feed additives, known as microbials, which improve animal health and performance by optimizing digestive function and immune strength. The acquisition 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. It specializes in free-choice minerals that help grazing cattle meet their nutritional needs. Cargill bought full ownership of its premix joint venture in South Africa, which increases the company’s presence in a region where protein demand is growing.
In poultry, Cargill is forming a joint venture with UK-based Faccenda Foods. Once completed, the venture will serve the country’s food retailers and foodservice companies with fresh chicken, turkey and duck. With regard to organic growth, Cargill is investing $146 mill. in its cooked meats facility in Nashville, Tennessee. Acquired last year, the new outlay will double the plant’s pizza toppings capacity and fund the construction of a pepperoni production facility. The two projects will come on line in mid-2018 and mid-2019, respectively.