USA, Minneapolis. Cargill reported results for the fiscal 2019 fourth quarter and full year ended May 31, 2019.
The poorer results come shortly after the publication of the Cargill report by Mighty Earth, an NGO that described Cargil as the world's worst company and in a 50-page report lists all the company's possible misdemeanours, ranging from the destruction of the rainforest to child labour and lack of food safety.
Key measures include: Adjusted operating earnings were $476 mill., down 41% from the $809 mill. earned in last year’s record fourth quarter. This brought earnings for the full fiscal year to $2.82 bn., 12% below last year’s top performance. Net earnings on a US GAAP basis were $235 mill., down 67% from $711 mill. in the strong comparative period. For the 12 months, net earnings decreased 17% to $2.56 bn. Fourth-quarter and full-year revenues each dipped 1% to $29.9 bn. and $113.5 bn., respectively. Cash flow from operations equaled $5.19 bn., also a 1% decline.
Animal Nutrition & Protein was the biggest contributor to Cargill’s earnings for the quarter. Within the segment, North American protein results were slightly below last year’s level, as spring flooding in the US Midwest delayed cattle shipments and cool weather dampened the start of the outdoor grilling season. Still, domestic and export demand for beef remained strong, as did domestic demand for value-added egg products. Global poultry results trailed the year-ago level, hampered by a mix of market and operating challenges across regions. Animal nutrition earnings also were negatively affected by market disruptions, including the reduction in feed demand resulting from the culling of pigs in China and nearby countries to control the incidence of African swine fever, a virus fatal to pigs.
During the quarter, Cargill invested to serve growing demand for protein, particularly across Asia. In June, Cargill opened a $50 mill. addition to its poultry facilities in China’s Anhui province that increases capacity for cooked chicken products. To the south, a flagship facility for producing premixes and specialty feeds for young animals is under construction in Jiangxi province. It is expected to come on line at the end of 2020. The company also opened a state-of-the-art premix plant in Jordan to meet the specialized animal nutrition needs of customers in the Middle East and North Africa.
Building on earlier moves to diversify its protein business, Cargill invested in Aleph Farms, a cultured meat company focused on growing complex meat varieties such as steak. The new capital will help Aleph Farms move closer to commercialization, with a limited consumer product launch anticipated in three-to-five years. Cargill is committed both to growing its traditional animal protein business and to exploring new opportunities to meet higher future demand for all forms of protein.