MINNEAPOLIS — Net earnings fell 20 percent and revenue decreased 4 percent for Minneapolis-based Cargill in the second quarter ended Nov. 30, 2018.

“Our teams executed in a world of uncertainty to bring the best solutions for our customers and the consumers they serve,” said David W. MacLennan, chairman and CEO, in referencing changing market conditions when Cargill reported financial results on Jan. 3. “Now, we are pushing to ready our business for the future with continuous improvement, financial discipline and a disruptive mindset.”

While net earnings were $741 million, down from $924 million in the previous year’s second quarter, adjusted operating earnings were $853 million, down 10 percent from $948 million. Second-quarter revenues decreased 4 percent to $28 billion.

Operating earnings in the Food Ingredients & Applications segment decreased with mixed results across the segment. Historically low ethanol prices in North America and higher energy and raw material costs in Europe led to a decrease in starches and sweeteners earnings. Cargill reported strong cocoa and chocolate performance in regions other than North America, which experienced lower sales volume and higher operating costs. Edible oils and bioindustrial performed better than in last year’s second quarter.

The Animal Nutrition & Protein segment provided the largest contribution to Cargill’s adjusted operating earnings despite results coming in below the previous year’s second quarter. Performance was higher in North American protein due to demand for beef and supplies of fed cattle boosting beef production and sales to domestic and export markets. Demand for egg products also drove earnings. Political instability in Central America and market challenges in China and Vietnam reduced results in the segment’s global poultry business.

Earnings rose in the Origination & Processing segment as Cargill kept products moving even though trade turbulence disrupted agricultural markets. Oilseed processing was strong in North America and Europe as growing protein consumption drove global demand for soybean meal for livestock feeds.

Results in the Industrial & Financial Services segment were below the previous year’s second quarter, partly because of weakness in financial markets that negatively affected Cargill’s investment in managed funds. Results for the ocean transportation business came in lower after freight markets declined.

In November, Cargill announced the acquisition of Colombia-based Campollo, a leading poultry and protein processor. MEAT+POULTRY interviewed Xavier Vargas, president of Cargill Protein Latin America, on Dec. 28 about Campollo.  

Cargill finalizes deal with Konspol

On Jan. 3, Cargill also announced the completed acquisition of Konspol, one of Poland’s leading value-added food companies. Cargill purchased the company’s food and fresh chicken business as well as a portfolio of products including branded and private-label products for an undisclosed amount.

“The combination of Konspol and Cargill’s Global Poultry business opens even more possibilities for growth across Europe and around the world,” said Chris Langholz, president of Cargill Global Poultry. “Konspol is a remarkable company, we are eager to continue Konspol’s 40-year track record of success and ensure a continued focus on values that have helped our companies and communities thrive.” 

Konspol operates a feed mill, five broiler farms and two processing complexes in Poland and employs more than 1,700 people. That brings the total of Polish employees of Cargill to more than 3,400.