World Grain - September 2015 - 19

NEWSREVIEW

Value-added products boosts MGPI profits as Cray retires
ATCHISON, KANSAS, U.S. - A shift in
product mix coupled with a heightened focus on higher value products paved the way
to a positive quarter at MGP Ingredients, Inc.
(MGPI).
Net income at MGPI in the second quarter
ended June 30 was $7,871,000, equal to 44¢
per share on the common stock, up 54% from
$5,099,000, or 28¢ per share, in the same periRGD\HDUDJR*URVVSUR¿WIRUWKHTXDUWHUPRUH
than doubled, increasing to $17,528,000 from
$8,308,000, while operating income tripled to
$9,503,000 from $3,072,000. Sales rose 7% to
$92,071,000 from $85,903,000.
"We continue to be very pleased with our
UHVXOWVWKURXJKWKH¿UVWKDOIRIDVZHDJgressively implement our strategic plan," said
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"Our portfolio of specialty wheat proteins
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ORQJWHUPPDFURKHDOWKWUHQGVVXFKDVKLJK¿EHUKLJKSURWHLQDQGQRQ*02´*ULI¿QVDLG
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we are seeing strong interest in our egg white
replacement solutions."
MGP also recently announced that food

industry executive David Colo has joined the
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created by the retirement of Cloud L. "Bud"
Cray.
Chairperson Karen Seaberg also expressed
deep gratitude to Cray for, "the outstanding
service he has provided to the board and company for almost 70 years." As his daughter, she
spoke to the guidance he has given her and the
examples he has set on "how to lead with a visionary approach and an optimistic attitude that
anything is achievable if one is determined and
willing to work hard toward a positive goal."
She added, "I have the utmost respect for my
father and, together with my fellow directors,
applaud all of the great things he has done over
the years to make MGP a stronger and increasingly progressive business."
Cray joined MGP as a full-time executive in
1947. He succeeded his father, Cloud L. Cray,
Sr., as president in 1962 and held that position
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EHJLQQLQJKLV¿UVWWHUPDVERDUGFKDLUPDQLQ
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to his son-in-law, Ladd Seaberg, who succeeded him as president eight years earlier.
On Jan. 1, 1995, Cray retired from inter-

nal management of the
company, choosing to
continue his involvement in MGP through
his role on the board. He
was succeeded as chairman of the board by
Ladd Seaberg in 2006.
He resumed his role as
Cray
chairman in May 2014
and was succeeded by his daughter, Karen
Seaberg, at the end of that year.
"It has been my distinct privilege to serve
this great company in a variety of leadership
capacities over the past many years," Cray
said. "My tenure has been a link between
my father, Cloud L. Cray, Sr., who founded
the company, and my daughter, Karen, who
has so ably succeeded me as board chair. Her
husband, Ladd Seaberg, was also an important part of carrying on our family legacy until having to step down due to health issues.
I know that Karen will provide outstanding
leadership while continuing the Cray family
legacy of unyielding devotion to this company and its shareholders, employees and the
communities it serves."

Agribusiness segment pushes Bunge profits down
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Bunge Limited reported on July 30 that earnings for the second quarter were $72 million,
or 50¢ per share, down from $272 million or
$1.71 per share in the same quarter a year ago
due to poor returns in the agribusiness segment.
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reported earnings of $321 million, or $2.21 per
share, up from $245 million or $1.65 per share
in the same period a year ago.
The company reported net sales of $10.8 billion for the quarter, down from $16.8 million in
the same quarter of 2014.
"Conditions in the second quarter were
more challenging than expected. In agribusiness we experienced weak softseed margins,
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said Soren Schroder, Bunge's chief executive
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volumes came under dramatic pressure in our
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as consumers adjusted to an environment of
LQFUHDVLQJ XQHPSOR\PHQW LQÀDWLRQ DQG FXUrency devaluation."
The decrease in milling products performance in the quarter was primarily due to lowHUUHVXOWVLQ%XQJH¶V%UD]LOLDQZKHDWDQG86

FRUQPLOOLQJRSHUDWLRQV,Q%UD]LOWKHFRPSDny experienced a sharp reduction in volumes
as customers, particularly food service, pulled
back demand in response to the depressed
economic environment. In U.S. corn milling,
slightly higher margins were more than offset
by lower volumes as demand from ready-toeat cereal and brewing industries remained
soft. Adjusting for a $4 million mark-to-market
impact related to hedges on wheat inventory,
which will reverse later in the year, results in
the Mexican wheat milling operation were
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were also similar to the prior year.
Grains second-quarter earnings were $71
million, down from $82 million in the same
quarter a year ago. The results in grain origination were slightly lower as improved perIRUPDQFH LQ %UD]LO ZKLFK EHQH¿WHG IURP D
pick-up in farmer selling during the last half of
June, were more than offset by weaker margins
and volumes in North America and Argentina.
5HVXOWVZHUHORZHULQJUDLQWUDGLQJ GLVWULEXtion due to weaker margins and volumes and
less effective risk management strategies durLQJWKHTXDUWHU5HVXOWVLQRFHDQIUHLJKWZHUH
higher due to good execution and the reversal
of approximately $10 million of mark-to-market losses on bunker fuel hedges that were in-

www.World-Grain.com / World Grain / Septebmer 2015

curred in the fourth quarter of last year.
Oilseeds second-quarter earnings were $63
million, down from $229 million in the same
quarter a year ago. Canadian canola processLQJ PDUJLQV ZHUH VLJQL¿FDQWO\ ZHDNHU WKDQ
DQH[FHSWLRQDOO\VWURQJSULRU\HDUSHULRG(Xropean softseed margins were down from last
year, driven by the combination of slow farmer
selling and decreased vegetable oil demand,
Bunge said.
In soy processing, results were higher in
Asia, which recovered from depressed levels
seen for most of 2014, and in the U.S., where
XWLOL]DWLRQVDQGPDUJLQVH[FHHGHGODVW\HDUGXH
to strong domestic and export demand. Offsetting these improvements were lower results
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good in both regions, they were not as strong
as last year, and volumes in Argentina were
impacted by strikes during May which delayed
the start of peak season crushing. Oilseed tradLQJ GLVWULEXWLRQ UHVXOWV ZHUH VLJQL¿FDQWO\
lower in the quarter due to lower margins and
volumes, Bunge said.
"Looking ahead to the second half of the
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to exceed $1 billion," said Schroder. "Demand
for soy meal and soy oil remains solid, supporting a promising soy crush outlook."
19

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