Cargill this week reported financial results for the fourth quarter and full fiscal year ending May 31st, 2016. The report comes as the company is on what it calls a “transformative path” to strengthen financial performance. Cargill reported full year earnings were down 11 percent, but noted net earnings were up 50 percent. The net earnings jump is attributed to the reshaping of the company’s portfolio, including selling off multiple pieces of the business in the refocusing efforts. Cargill CEO David MacLennan says while Cargill has more work to do, the company has already made many changes and is “seeing improved results.”
From the National Association of Farm Broadcasting news service.
Cargill reports fiscal 2016 fourth-quarter and full-year results
Company focused on changes to improve long-term performance
Cargill reported financial results for the fourth quarter and full fiscal year ended May 31, 2016. The company is on a transformative path to strengthen financial performance, move in step with changing consumer values, and become the most trusted source of sustainable products and services for customers.
- Adjusted operating earnings were $1.64 billion, a 15 percent decrease from the prior year. On a U.S. GAAP basis, net earnings totaled $2.38 billion, up 50 percent from fiscal 2015.
- The variance between adjusted and net earnings included gains on sales of businesses and other assets, asset impairment charges and a LIFO inventory adjustment.
- Revenues totaled $107.2 billion, an 11 percent decline that reflected lower commodity prices, a strong U.S. dollar and divestitures.
- Cash flow from operations equaled $3.41 billion.
- The company recorded an adjusted operating loss of $19 million compared with a $230 million profit in the prior period. On a U.S. GAAP basis, net earnings were $15 million against a $51 million loss in last year’s fourth quarter.
- Revenues dipped 5 percent to $27.1 billion.
“We are looking ahead as we position our company for higher performance and sustained growth,” said David MacLennan, Cargill’s chairman and chief executive officer. “We have more work to do, but where we have already made changes we are seeing improved results.”
MacLennan cited the broad earnings improvement in food ingredients and the reshaping of the company’s portfolio. “We made important changes, adding capabilities essential to our customers’ success. This includes more than $3 billion in strategic acquisitions and new or expanded facilities, as well as nearly $2.4 billion in divestitures. These moves are making us more competitive in sectors where we intend to lead.”
Cargill delivered strong performance in global animal nutrition, value-added protein and poultry in many regions. In addition, the company posted good results in grain and oilseeds in South America and China, and in food ingredients such as salt, starches, sweeteners and texturizers. Trading activities yielded mixed results, in part due to low volatility in agricultural commodity markets for most of the fiscal year. Stalled growth in several emerging economies also affected earnings.