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Cargill, the world’s biggest agricultural commodities merchant, has reported its strongest third quarter in seven years, aided by sales of sweeteners and salt.
The Minnesota-based company said adjusted operating profit climbed 50 per cent year-on-year to $715m in the quarter that ended last month. Unadjusted for items like the timing of hedges, net profit was $650m, up 42 percent on the year.
The improvements indicate that management and portfolio changes under way at the privately owned company are beginning to yield results. Earnings have increased over the past three quarters, a turnround after bad soyabean and energy trades pushed Cargill to an adjusted operating loss in the final quarter of fiscal 2016.
The company said its food ingredients and applications division contributed the most to profits in the third quarter. Sales of sweeteners, cocoa and chocolate all boosted business, along with salts used to season foods and melt ice on North American highways.
The falling price of beef aided sales from its meat-packing plants in North America, leading to a significant rise in profit at Cargill’s animal nutrition and protein business. Cargill’s vast cooked-chicken complex in Thailand also increased exports to customers in Asia, the company said.
Cargill has the broadest grain trading network in the world. Its origination and processing business, which buys commodities from farmers for processing or shipping around the world, reported slightly lower profit, weighed down by heavy rains in Argentina and lower corn export volumes from Brazil due a drought.
However, Cargill said its soyabean-crushing business had strengthened in China — the world’s biggest soyabean importer — as did grain trading out of Australia, a major wheat exporter.
David MacLennan, Cargill’s chief executive, delivered a defence of free trade in agriculture at the FT Commodities Global Summit this week in the face of protectionist sentiment in Washington. He said Wednesday that the company’s results showed the company was “on the right path forward”.
Cargill’s revenues rose 8 per cent in the quarter to $27.3bn.
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