Burgeoning private agribusiness Cargill saw net earnings slip in the first quarter of 2004, but performance remained on track topping last year's figures by a wisp.
The company reported that net earnings in its fiscal first quarter ended August 31 fell to $347 million compared with $591 million for the same period last year when asset sales were included.
Earnings of $348 million for the fourth quarter rose slightly above $345 million for the first quarter in 2003 boosted by its animal feed sector, beef processing, sweeteners and grain businesses.
The figures are reasonable against a backdrop of lower soybean production in the US, in fact the lowest in seven years due to hot, dry weather in the grain belt of the US this summer.
Last month Bunge, one of Cargill's key competitor's, reduced its third-quarter and full-year earnings estimates, mirroring the reduced US soybean crop.
Moves for the company in the first quarter of 2004 included the sale of its 50 per cent stake in a US feed additives joint venture to its former partner, German chemicals firm Degussa.
An active second quarter to date has already seen the ambitious company muscling further into Europe with the purchase of UK flavours company The Duckworth Group, just days after the acquisition of French cocoa and chocolate ingredients company OCG Cacoa. In addition, the Russian government said this week that Cargill plans to invest €172 million in developing its business in Russia.
For the 2003 fiscal year, earnings from operations hit $1.036 billion, an increase of 21 per cent from $855 million a year ago. But these results also reflect proceeds from litigation settlements and the fact that the company realised $254 million from two items - discontinued operations, including the sale of North Star Steel's tubular steel division, and the adoption of new rules for goodwill accounting. These brought Cargill's net earnings to $1.29 billion for the full year, compared with $798 million for the previous year.