World Grain - September 2015 - 17

NEWSREVIEW

Fourth-quarter loss crimps Cargill fiscal-year earnings
MINNEAPOLIS, MINNESOTA, U.S. -
Cargill earnings dropped 13% in the fiscal
year ended May 31 as the company recorded a fourth-quarter loss and dealt with
a sluggish environment in some emerging
markets, the company said Aug. 6.
Fiscal-year earnings of $1.58 billion
were down 13% from $1.82 million in the
previous fiscal year. Fiscal-year revenues
fell 11% to $120.4 billion. In the fourth
quarter ended May 31, Cargill reported a
net loss of $51 million, which compared
with earnings of $376 million in the fourth
quarter of the previous year, and revenues
of $28.4 billion, which compared with
$36.2 billion.
David MacLennan, Cargill's president
and chief executive officer, said in the
fourth
quarter all four of
the company's
business segments
were
profitable, but
the loss resulted from charges taken at the
corporate level,
including
an
asset
impairMacLennan
ment charge related to the company's enterprise resource
planning (ERP) system and an additional
charge related to Venezuela's currency.
"While several Cargill businesses
generated very strong earnings in fiscal
2015, we lagged results from the prior
year and did not meet our own expectations," MacLennan said. "The economic
environment remains sluggish in many
emerging markets where we have invested
significantly over the past several years.
Even so, we aim for growth and profitability through these cycles. We are moving
forward with good progress on changes
begun last year to optimize the business
portfolio, reduce costs and increase operational effectiveness."
In Cargill's Food Ingredients and Applications business, earnings were lower
in both the fiscal year and the fourth quarter when compared with the previous year.
Ardent Mills, a flour milling joint venture
formed by Cargill, ConAgra Foods, Inc.
and CHS in fiscal year 2014, had a successful first year of operation in fiscal
year 2015. Cargill's salt operations performed strongly. In emerging markets the
economic slowdown and excess industry

capacity decreased results. Evolving consumer preferences in developed economies also affected results negatively.
In the Origination and Processing business, full-year earnings were up while
fourth-quarter results were down.
A record U.S. soybean crop, limited
supplies from South America and a strong
export pull for most of the year boosted

soybean crush volumes in North America.
Farmers held their crops in Argentina, and
slower farmer selling also was noted in
Brazil. Cargill's evacuation and the subsequent armed occupation of the company's sunflower seed processing plant in
Donetsk, Ukraine, in July 2014 decreased
earnings in the region in the following 11
months.

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World Grain - September 2015

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