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Cargill's profit rises 62% in fiscal '03 amid broad-based improvement

(Wednesday, Aug. 13, 2003 -- CropChoice news) -- Lyle Niedens, Bakingbusiness.com, 08/12/03: MINNEAPOLIS -- Cargill Inc. said Tuesday that its fiscal fourth-quarter earnings rose 3%, concluding a year in which the Cerestar corn milling business it bought in August 2002 met financial targets.

The largest privately owned company in the United States reported net income of $141 million in the quarter ended May 31, up $4 million from the same period last year.

The quarter's results pushed Cargill's net earnings for the fiscal year to $1.29 billion, a 62% increase from $798 million the previous year. Those results include a $254 million gain from discontinued operations and new rules for goodwill accounting.

Operating profit, including proceeds from litigation settlements, rose 21% to $1.04 billion from $855 million in fiscal 2002. Revenue in the year totaled $59.9 billion, a 19% increase, and cash flow rose 26% to $2.9 billion. The company began to account for stock options as an expense during the year, which reduced its reported earnings slightly.

Warren Staley, Cargill's chief executive, said the company's earnings and sales growth reflected improvements in a majority of its businesses. In particular, he cited strong growth in the company's food ingredients businesses in Europe, North American and Latin America.

In addition, the company's animal nutrition business, its red meat division and its egg products segment all performed well in fiscal 2003, Mr. Staley said. He added that the company's global grain and oilseed supply chain, along with its risk management and financial businesses, contributed to the year's solid performance.

"The consistency of our results was driven by four factors," he said. "We made progress on our journey to serve customers better. We improved our ability to integrate newly acquired businesses. Our team did an excellent job managing risk and uncertainty in challenging environments. And we kept a constant eye on controlling costs and increasing efficiency."

Mr. Staley praised the company's work in integrating Cerestar. Cargill bought a majority stake in the France-based company in April 2002, then bought the remainder four months later.

"In its first year, the combined enterprise hit its financial targets, and the important work of unifying our work teams, migrating capabilities and sharing knowledge is well under way," he said.

In addition to Cerestar, a leading global marketer of starches and sweeteners, the company in fiscal 2003 purchased the Peter's Chocolate brand and, through a joint venture, the flour milling business of Australia's Goodman Fielder. It also bought Provimi Kliba, a leading animal nutrition company in Switzerland, and the phosphate assets of Farmland Hydro in Florida.