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Cargill
Reports 4Q Earnings of $744 Million, Up From $628 Million in 4Q 2007
Minneapolis, MN—Cargill
reported August 19 earnings from continuing operations of $744 million
in the 2008 fourth quarter ended May 31, up 18 percent from $628 million
in the same period a year ago.
A $310 million
gain on the sale of discontinued operations brought fourth-quarter net
earnings to $1.05 billion.
For the full fiscal
year, Cargill earned $3.64 billion from continuing operations, a 55
percent increase from $2.34 billion a year ago.
The $310 million
gain on the sale of discontinued operations in the fourth quarter brought
fiscal 2008 net earnings to $3.95 billion.
Revenues for the
full year rose 36 percent to $120.4 billion.
Cash flow from
operations increased 77 percent to $7 billion.
“Cargill
posted a record financial performance in a year of exceptionally strong
commodity demand, market turbulence and price risk,” said Greg
Page, Cargill chairman and chief executive officer.
“By bringing
to bear our business diversity, the full capacity of our global assets,
strong risk management and a significant increase in capital deployed,
we operated successfully in the most volatile agricultural and energy
markets in decades.
"Despite tight
stocks of many agricultural commodities, we maintained reliable supply
chains for our customers and created value-adding solutions.”
Page said Cargill’s
investment in the fertilizer industry also contributed significantly
to company results.
Since 2006, global
demand for crop nutrients has surged in response to the world’s
increased need for higher crop yields to meet rising demand for food
and agricultural commodities.
Among Cargill’s
five business segments, fourth-quarter earnings were led by the origination
and processing segment and the industrial segment, both of which were
up substantially from the same period a year ago.
Earnings in agriculture
services, food ingredients and applications, and risk management and
financial were below the year-ago levels for the three segments.
For the
full year, earnings were led by origination and processing,
which increased results substantially from last year’s level.
The industrial
segment, which includes Cargill’s investment in the fertilizer
business, also posted exceptionally strong earnings.
Both the agriculture
services and the food ingredients and applications segments were well
ahead of last year.
Earnings in risk
management and financial declined moderately from last year’s
high, though outstanding performances in several areas reflected the
segment’s diversification.
Page underscored
the importance of Cargill’s attention to maintaining a strong
balance sheet.
“Over the
past two years, it has required on average an additional $15.5 billion
in total assets to run the company.
"Given the
persistent turbulence in credit markets, Cargill’s adherence to
disciplined financial management was a significant element of our performance.”
In assessing
economic forces at work in the world, Page noted that growth
in gross domestic product among the world’s developing economies
has averaged more than 6 percent a year since 2000.
Although this expansion
is projected by the International Monetary Fund and others to slow somewhat
in 2008 and 2009, it has given millions of people the means to improve
their diets, which has lifted demand for grains and oilseeds.
Underpinned by
high oil prices and government mandates and subsidies, global production
of biofuels also has boosted demand.
Yet world grain
stocks sit at 35-year lows, drawn down by weather-affected crops and
slower growth in average crop yields worldwide.
The tight dynamic
sent prices and price volatility in fiscal 2008 to new highs and elevated
energy prices increased the cost of producing and transporting agricultural
commodities.
Page said the
world has the means to give agriculture the chance to catch up with
demand.
“If markets
are allowed to work, today’s prices can spark a supply response
from farmers.
"A rekindling
of public and private investment in agriculture and in rural infrastructure
will drive productivity gains.”
Cargill
continues to invest in global food and agriculture, including
in developing countries worldwide where more than half of its 160,000
employees live and work.
“Cargill
people play valuable roles in helping improve the quality of local agriculture,
in providing farmers with access to world markets, and in managing basic
and value-adding food-processing facilities,” said Page.
“This generates
income and investment flows in rural communities and, of key significance
today, allows food commodities to move from places of surplus to places
of need.”
Page emphasized
the importance of innovation in food, agriculture and risk management.
“We are finding
new ways to connect with customers, nongovernmental organizations and
academic institutions so that together we can nourish new ideas and
possibilities in the complexity that is today’s global economy.”
For more information,
call 952-742-6405.
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