Full-year earnings down 13 percent
Cargill reported a net loss of $51 million in the fiscal 2015 fourth quarter ended May 31, 2015, compared with earnings of $376 million in the same period a year ago. Fourth-quarter revenues were $28.4 billion, compared with $36.2 billion in the year-ago period.
For the full fiscal year, Cargill earned $1.58 billion, a 13 percent decrease from $1.82 billion in the prior year. Revenues decreased 11 percent to $120.4 billion. Cash flow from operations totaled $3.82 billion, up 1 percent from fiscal 2014.
“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,” said David MacLennan, Cargill’s president and CEO. “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.”
MacLennan noted that for Cargill, how it achieves results is paramount. “Over the 150 years that Cargill has been in business, we’ve seen big changes in the marketplace, including today’s profound rise in the importance of sustainability. Given Cargill’s broad presence in food and agriculture, we’re in a good position to drive positive change. We want to be the most trusted source of sustainable products and services in our industry.”
In addressing the fourth quarter, MacLennan noted that all four of the company’s business segments were profitable. The loss in the three-month period resulted from charges taken at the corporate level, including an asset impairment related to the company’s enterprise resource planning (ERP) system and an additional charge related to Venezuela’s currency.
The Animal Nutrition & Protein segment posted increased profits for the full fiscal year, with strong performances in global animal nutrition, Central American poultry, and U.S. pork, turkey and egg further processing. The segment executed extremely well, drawing on its global reach, diverse products and services, and lower feed input costs. Softer results in some animal protein businesses held fourth-quarter earnings below the year-ago level. The biggest factor was the North American market, where high cattle costs decreased beef’s competitiveness relative to other meats. In the fiscal 2016 first quarter, Cargill agreed to sell its U.S.-based pork business to JBS USA Pork for $1.45 billion, pending regulatory review and approval.
MacLennan noted Cargill has experienced tremendous growth and success during its 150 years. “Our company has a history of rising to challenges, and we continue to do so today. We are focused on improving profitability and restoring growth, while fulfilling our commitment to helping customers thrive and feeding the world sustainably.”