Cargill reported dismal second quarter profits on the back of a host of macro-economic factors, higher feed costs and slack demand for meat. Profits for the quarter were down 88% compared to the previous year, due also to a lagging sugar market, ‘significant challenges’ in the commodity-based trading and asset management businesses and one-time hits on account of asset impairments and acquisition expenses. Revenues, however, were up 17% at $33.3 billion.
“Cargill has been through difficult cycles before, made changes and emerged stronger for it,” CEO Greg Page said in a statement. “We are confident that the actions we are taking to create a more agile enterprise will better position us in the current economic environment.”
He also said that the company was working on cost reduction and rationalization of processes, and that he was optimistic about earnings in the rest of the fiscal year considering the company’s strong balance sheet and availability of finance.
Cargill is one of the world’s largest private companies and has just completed the $2 billion acquisition of Provimi, a global animal nutrition company.