The 69 per cent drop in fourth quarter net earnings – from $1.05bn (€745m) to $327m (€232m) – still did not have a significant effect on the company’s full year results, Cargill said on Tuesday. Over the whole of fiscal 2009 it recorded the second-best year in the company’s history, with earnings of $3.33bn (€2.36bn), down 16 per cent from last year’s record $3.95bn (€2.8bn).
Cargill chairman and chief executive officer Greg Page said: “The year was a tale of two halves. Cargill posted record results through November. In the second half, earnings slowed considerably as the world economy contracted for the first time in six decades. In the end, the net effect was the second-best year in our company’s history.”
Page put the company’s resilience in recession down to several pre-existing factors as well as smart business strategies: “The company went into the downturn with a strong balance sheet,” he said. “We acted early to reduce costs and decrease the use of debt and operating working capital. Our trading teams anticipated price volatility correctly in both the run-up and the run down in commodity values.”
Additionally, the company’s global presence allowed it to take advantage of markets where the downturn has been less strongly felt.
“Operating in many industries and in many countries allowed us to cushion some of the downturn by serving areas of growth, particularly in developing economies that experienced smaller declines in their gross domestic products,” said Page.
He added that Cargill expects the effects of the global economic slump to continue for some time yet.
“The path to economic recovery may well be uneven, but Cargill remains optimistic,” Page said.
As a private company, Cargill does not release its full financial statement nor give a breakdown of performance between divisions. However, it said that food ingredients and applications results for the full fiscal year were “down moderately”, as were earnings for origination and processing.