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By Karl Plume
Oct 4 Global commodities trader Cargill Inc
reported a sharply higher quarterly net profit on
Tuesday, helped by rising beef demand and stronger grain trading
and processing margins.
The privately held company's net income rose 66 percent to
$852 million in the first quarter ended Aug. 31 from $512
million a year earlier.
Excluding items, Minnesota-based Cargill's operating profit
rose to $827 million from $611 million. Revenue fell marginally
to $27.1 billion from $27.5 billion.
The strong results came despite warnings earlier this year
from Cargill and some agribusiness rivals that weak commodities
prices and oversupplied grain markets would create headwinds for
Grain prices have recently touched multi-year lows and U.S.
farmers have begun harvesting what are expected to be
record-large corn and soybean crops this fall.
Rival agribusiness Louis Dreyfus last week
reported a small rise in 2016 first-half net profit, but
cautioned that commodities markets remain difficult.
Bunge Ltd and Archer Daniels Midland Co will
report results in about a month.
Cargill is in the midst of a restructuring that has included
the shedding of assets such as its U.S. pork business and U.S.
retail agriculture outlets and the expansion of investments in
food ingredients and aquaculture. The moves are part of a
long-term strategy for the 151-year-old company to bolster
margins and become more responsive to commodities market swings.
"We've been charting a new path to higher performance, and
it's rewarding to see the many changes we've made resulting in
gains across much of the company," Chief Executive David
Cargill's animal nutrition and protein segment saw earnings
rise sharply from a year earlier as the company's beef business
benefited from rising demand and low cattle costs due to an
expanding North American herd.
Earnings rose moderately in the company's origination and
processing business, which buys, sells, stores and processes
crops such as corn and soybeans, as soybean processing margins
improved, the company said.
Cargill's profit was also helped by improved earnings from
starches, sweeteners and edible oils.
(Additional reporting by Arathy S Nair in Bengaluru; Editing by
Ted Kerr and Meredith Mazzilli)