Land O’Lakes’ Moark achieves US$599 million in 2011

28-02-2012 | | |
Land O’Lakes’ Moark achieves US$599 million in 2011

Land O’Lakes, the second-largest US farmer-owned agricultural cooperative, announced its sales and earning for 2011; a year in which Land O’Lakes experienced record sales and net earnings of US$182 million.

Chris Policinski, Land O’Lakes’ president and CEO, said: “Our 2011 results reflect strong performance in a challenging economy and volatile marketplace.”
“Agriculture and food production are among the best growth industries of our era,” Policinski added.
He cited the increasing demand for food, driven by an expanding global population, which is expected to increase from nearly 7 billion people today to more than 9 billion by 2050.
Sales and Earnings
Land O’Lakes 2011 net sales totaled US$12.8 billion, up 15 percent from US$11.1 billion in 2010. These results include record revenues in the company Dairy Foods, Feed and Crop Inputs businesses.
Net earnings for 2011 totaled US$182 million, up 2 percent from US$178 million in 2010.  Earnings for 2011 were impacted by US$14.7 million in unrealized hedging losses (as of Dec. 31, 2011), while 2010’s earnings include the impact of US$6.2 million in unrealized hedging gains.
Company officials noted that unrealized hedging is more an indicator of market conditions at a given time than of performance.
Balance Sheet
Total balance sheet debt, including capital leases, was US$915 million at year-end, versus US$618 million as of Dec. 31, 2010.
This increase was mainly due to higher working capital use, stemming from increased product prices and business growth.
The company took advantage of historically low market interest rates to lock in attractive long-term debt during the year, including a US$150 million, 10-year term loan at the parent level and a US$60 million, five-year term loan at its Moark subsidiary.
The company’s Layers/Eggs business, Moark achieved US$599 million in sales, up 17 percent from 2010.
The eggs business reported a US$3.3 million pretax loss for the year, compared to a US$27.2 million pretax loss for 2010 (when results included a one-time charge for a legal settlement).
Unrealized hedging impacts in this business were not significant.
Volumes were strong in the eggs business, up 6 percent overall and up 17 percent in higher-value branded and specialty eggs.
Those increases were offset by increased input costs, particularly feed.
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