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Home / Bioethanol / News Cargill more than triples its profit
Cargill more than triples its profit // Company traders reacting quickly to word of a drought-induced Russian ban on wheat exports helped fill Cargill's coffers.
Copyright 2011. The Star Tribune Company. All rights reserved. Minnetonka-based Cargill, one of the world's largest private companies, reported net profits of $1.49 billion, up from $489 million a year ago. Excluding Cargill's 64 percent interest in publicly traded fertilizer giant Mosaic Co., Cargill's earnings would have been $832 million, nearly double last year's $420 million. The company reported $31.1 billion in revenue during the second quarter, up 16 percent from the same time last year. "Cargill generated strong results across the breadth of our businesses," Chief Executive Greg Page said in a news release. Four of Cargill's main business segments sported earnings increases during the quarter. Results were led by the company's origination and processing segment, which includes its global grain export and transportation trade, along with processing operations like oilseed crushing and sugar refining. The company particularly got a boost from a drought in Russia that forced that country last summer to ban wheat exports. Russia is one of the world's biggest wheat exporters, and the export ban created much volatility in wheat prices. Grain trading companies like Cargill can make a lot of money if they make the right bets on volatile prices. "This group did a good job of reading the markets early and reacting quickly," Cargill spokeswoman Lisa Clemens said. Russia is usually a big supplier of wheat to Egypt. Cargill reacted to the Russian export ban by lining up wheat exports to Egypt from western Europe and then arranging increased corn exports to Europe from the Americas to make up for wheat that might normally have gone to animal feed, she said. Cargill's second-quarter earnings also rose in its agricultural services division, which is involved in internal grain movements in North America. Those results were aided by "bigger grain handling volumes made possible by the large North American harvest," the company said in a news release. Cargill's food ingredients group posted a moderate profit increase but had more mixed results. Volumes were up in some areas, while other areas were pressured by higher raw material costs. The food ingredients group is one of Cargill's most diverse business units, covering everything from meat processing to chocolate. A surge in fertilizer profits at Plymouth-based Mosaic anchored an increase in profit in Cargill's industrial group. But earnings decreased in Cargill's risk management and financial segment, reflecting non-volatile energy markets, which cut opportunities for trading gains. Mike Hughlett - 612-673-7003
Date: 15.01.2011 Comments:Leave your comment
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It's imperative that more poeple make this exact point.
It's imperative that more poeple make this exact point., 16.11.2011 13:59:38