Lisa Clemens, Cargill, 952/742-6405
Cargill reports fiscal 2001 earnings
MINNEAPOLIS -- Cargill today reported net earnings of $358 million for the 2001 fiscal year, compared with $480 million in fiscal 2000, a decrease of 25 percent. Operating earnings, before restructuring charges and small losses from discontinued operations in both years, were $557 million in fiscal 2001, a 15 percent decrease from $659 million a year ago. The company had an $87 million net loss in the fourth quarter, which ended May 31, due to the restructuring charges taken in that period.
Cargill's fiscal 2001 revenues rose by 4 percent to $49.4 billion. Cash flow from operations was $1.73 billion, up 24 percent from the prior year.
"Several of the company's businesses delivered significant bottom-line growth in fiscal 2001. Others were adversely affected by difficult economic and market conditions, which reduced earnings in the second half," said Warren Staley, Cargill chairman and chief executive officer.
Staley said Cargill's meat processing and financial businesses continued to deliver excellent results, and the global grain and oilseeds businesses rebounded from last year's low. The winter's heavy snowfalls benefited the North America deicing salt business. Global petroleum and ocean transportation also performed well.
Net earnings were reduced by several factors, including the slowdown in the U.S. economy, a stronger U.S. dollar and country-specific events, such as the currency devaluation in Turkey. Industry overcapacity hurt results in flour, juice and steel, and the continued weakness in agricultural markets was hard on the company's farm services and fertilizer production businesses. Higher energy costs also were a significant part of the mix. The run-up in energy costs, however, lifted demand for ethanol and for subsidiary North Star Steel's seamless pipe products used by the oil and gas industries.
"In a difficult year, Cargill achieved modest top-line growth and maintained its strong equity base, cash flow and liquidity, all of which preserved our financial flexibility," said Staley. "We put those strengths to good advantage -- completing strategic acquisitions, including Agribrands International. Investment in new capacity was minimized, with capital spending directed instead to increasing innovation within our core and emerging businesses. In order to bring costs and capacity in line with market opportunities, we reduced operating costs and took other restructuring actions. As a result, we expect to be better positioned for growth."
Staley said Cargill made good progress in executing its corporate strategy to become a premier provider of customer solutions in food and agriculture. "Though we remain cautious about the global economic outlook, we're confident of Cargill's ability to manage during these challenging times with a focused discipline on customers, innovation and performance."
Cargill is an international marketer, processor and distributor of agricultural, food, financial and industrial products and services with 90,000 employees in 57 countries. The company provides distinctive customer solutions in supply chain management, food applications and health and nutrition.