USA- Seaboard Corp., a global agribusiness and transportation company, reported a decline in operating income for its Commodity Trading and Milling (CT&M) segment in the third quarter ended September 30.
The financial results, released by Seaboard headquarters in Merriam, Kansas, highlight the challenges faced by the company’s milling unit during this period.
During the third quarter of 2023, Seaboard Corp.’s CT&M segment recorded an operating income of US$33 million, marking a 33% decrease from the $49 million reported in the corresponding quarter of the previous year. The company attributed this decline primarily to lower margins resulting from reduced sales prices.
Had Seaboard not applied mark-to-market accounting to its derivative instruments, the operating income in the CT&M segment would have been US$35 million, down from US$48 million in the same period a year ago.
Net sales for the CT&M segment in the most recent quarter totaled US$1.25 billion, reflecting a significant 22% decrease compared to US$1.6 billion in the same period a year ago. Seaboard explained that this decline was primarily due to lower average sales prices resulting from fluctuations in commodity prices.
In a filing with the US Securities and Exchange Commission on October 30, Seaboard disclosed that it invested US$344 million in property, plant, and equipment during the first nine months of fiscal 2023.
Of this total, US$247 million was allocated to the Pork segment, and US$81 million was invested in the Marine segment. The company’s management has budgeted additional capital expenditures totaling US$240 million for the remainder of 2023.
Despite the challenges in the CT&M segment, Seaboard Corp. reported an overall net income of US$126 million in the third quarter, equivalent to US$108.55 per share on the common stock.
This represents a 14% decline from the US$146 million, or US$125.78 per share, reported in the same period a year ago. Net sales for the entire company were US$2.39 billion, down from US$2.89 billion in the corresponding period last year.
Seaboard Corp. will likely face ongoing scrutiny and strategic considerations as it navigates the complexities of market dynamics affecting its Commodity Trading and Milling segment.
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