Cargill, the world's largest agribusiness company, achieved a strong rise in net profit for the year to the end of May, despite reporting a 7% year-on-year fall in earnings during the fourth quarter.
The company, which is controlled by 80 members of the Cargill and MacMillan families, released its fourth quarter and 2011 fiscal results yesterday (9 August), reporting earnings of $404 million from continuing operations during the quarter, down from $435 million in the same period a year ago.
However, its full-year earnings were $2.69 billion, a 35% rise on the $1.99 billion achieved in the previous financial year.
The last year has been challenging for Cargill, said Greg Page, the agribusiness’s non-family chairman and chief executive officer.
“From weather-related supply shocks in food commodities, grain export restrictions and rising energy prices to the uneven global economic recovery, looming sovereign debts and deficits, political unrest and natural disasters – the uncertainty led to volatile prices across a range of raw materials,” he said.
The company also reported an additional $359 million during the quarter and $1.55 billion over the year from discontinued operations – income which came from Cargill’s former majority investment in the Mosaic Company, a fertiliser firm.
Including its earnings from Mosaic, Cargill achieved its best year ever, with net profits of $4.24 billion, thanks to strong global demand for agricultural commodities.
Cargill sold off its majority share in Mosaic in May, enabling it to boost its balance sheet by paying down debt. The company reported a one-time accounting gain of $11.49 billion on the distribution of its Mosaic shares, which were exchanged for Cargill stock and Cargill debt.
The business has invested heavily in acquisitions and new or expanded facilities, spending more than $3 billion during the 2011 fiscal year. This includes purchases of the AWB commodity management business in Australia, a Canadian grain facility, German cocoa and chocolate company Schwartauer Werke Kakao Verarbeitung Berlin and Indonesian starch and sweetener maker PT Sorini Agro Asia Corporindo Tbk.
Cargill was founded in 1865 by William Wallace Cargill and has remained privately owned since, employing 130,000 people in 63 countries.