Land O'Lakes Net Earnings Rise27 February 2014
US - Dairy, crop inputs, feed and egg company, Land O'Lakes has reported record annual sales and net earnings - up more than four and 27 per cent, respectively, from last year.
Land O’Lakes, Inc., has announced record annual sales of $14.2 billion, up 4.4 per cent from the prior year, and record net earnings of almost $306 million, a 27 per cent increase over the prior year. The strong 2013 results continue a trend of significant growth during which the farmer-owned, Fortune 200 food and agriculture cooperative has more than doubled annual sales and grown net earnings by more than 330 per cent over the last seven years.
Land O’Lakes, Inc., President and CEO, Chris Policinski, commented: “Our strong 2013 performance builds on our success of the last seven years. The record-setting year in Dairy Foods, combined with the continued strong performance of WinField, exemplify our commitment to delivering the products, programs and services that provide the greatest value for our customers and members alike.”
Overall results for 2013 also included a record return of $147 million to members, representing a 30 per cent increase in patronage compared to 2012. This is the fifth consecutive year cash to members has exceeded $100 million, bringing the seven-year total to more than $750 million.
A number of strong performances across Land O’Lakes’ core businesses drove the favourable year-end results including:
- Dairy Foods – 101 per cent year-over-year growth in pretax earnings,
- Crop Inputs – Greater than $200 million in pretax earnings for second consecutive year and
- Feed – 12 per cent annual sales growth in Companion Animal and $25 million annual sales increase in Lifestyle Feed compared to 2012.
For the quarter ending 31 December 2013, Land O'Lakes delivered net earnings of $108 million, a 19 per cent increase compared to Q4 2012. Fourth quarter pre-tax earnings were driven by a 306 percent increase in Feed, and a 421 percent increase in Layers compared to Q4 2012.
Mr Policinski added: “Our strategic direction is clear: Deliver strong financial performance while continuing to enhance our capabilities for future growth. We will continue to make strategic investments in our core businesses – from agriculture to animal nutrition to the dairy case.”
Land O'Lakes, Inc. Businesses
Dairy Foods generated record pre-tax earnings of $75 million on sales of $4.5 billion, up eight per cent from 2012. This year’s results, Dairy Foods’ highest earnings ever, were driven by improved margins on milk powders and butter in Global Dairy Ingredients along with records in sales volume and earnings in our Retail Foods and Foodservice businesses.
Demonstrating continued success in the agriculture market, Crop Inputs, operated through WinField Solutions, delivered $218 million in pre-tax earnings on sales of $4.76 billion. The performance in Crop Inputs is a direct result of strategic decisions to focus on key business segments with strong margins such as herbicides, insecticides and fungicides; seed treatments, adjuvants, micronutrients and plant growth regulators; and corn and alfalfa seed.
Feed, operated through the Purina Animal Nutrition business, delivered $18 million in pre-tax earnings on sales of $4.77 billion, a five per cent increase over 2012. While unfavourable commodity markets and trading results resulted in a decline in year-over-years pre-tax earnings, Purina’s overall volumes in the Lifestyle business increased, including strong advances in the Companion Animal business.
Layers, run by the Company’s subsidiary, Moark, LLC, recorded sales of $259 million. Pre-tax losses of $25 million in 2013 represent a $14 million year-over-year performance improvement compared to 2012. While challenges related to supply issues and high feed prices relative to egg prices impacted on the Layers business, an extensive focus on cost savings and improved operational efficiency drove the financial improvements in 2013.
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