Cargill has posted its worst quarter performance since 2001

Cargill has posted its worst quarter performance since 2001

US agribusiness giant Cargill has reported a second-quarter year-on-year profits slide of 88%, its worst quarterly performance in a decade.

Cargill said its earnings from continuing operations were US$100m for the quarter ended 30 November - down from $832m in the same period a year ago. Consolidated revenues in the quarter were $33.3bn, up 17% from the prior-year period.

The company said its food ingredients and agriculture services businesses generated "solid" earnings, but blamed "significant challenges" to its trading and asset management businesses for the results, as well as a poor performance in the sugar and meat market and higher raw material costs.

"The second quarter was significantly below expectations, especially in contrast to last year when we posted our strongest quarter ever," Cargill chairman and CEO Greg Page said yesterday (10 January).

"Our performance in the sugar market was poor. Additionally, our meat businesses...experienced one of their weakest quarters. Finally, we recognised a significant number of one-time items, including asset impairments, and acquisition and integration expenses."

Page said Cargill is actively working to reduce its costs and simplify its work processes, and he is optimistic about the company's prospects for the second half of the fiscal year.

"Cargill has been through difficult cycles before, made changes and emerged stronger for it. We are confident that the actions we are taking to create a more agile enterprise will better position us in the current economic environment," he said.

In the first six months, earnings from continuing operations were $336m, compared with $1.53bn in last year's first half. First-half revenues rose 28% to $67.9bn.