MERRIAM, KANSAS, U.S. — Seaboard Corp. reported on Feb. 26 a loss of $3 million for its Trading and Milling segment for the year ended Dec. 31, 2015, compared to a $41 million operating income profit in 2014.
Commodity Trading and Milling segment operating income decreased $52 million for 2015, compared to 2014. The decrease primarily reflected certain unfavorable market conditions, which resulted in lower margins on commodity trades to third parties, the company said. The decrease also reflected an increase in bad debt expense primarily attributable to trade receivables with an affiliate in Brazil and fluctuations of $8 million of mark-to-market derivative contracts. Excluding the effects of mark-to-market adjustments for derivatives contracts, operating income decreased $44 million, the company said.
Net sales for the Commodity Trading and Milling segment decreased $477 million for 2015 compared to 2014. The decrease primarily reflected lower sales prices for almost all commodities sold and, to a lesser extent, lower sales volume primarily for corn.
Due to worldwide commodity price fluctuations, the uncertain political and economic conditions in the countries in which Seaboard operates, and the current volatility in the commodity markets, management said it is unable to predict future sales and operating results for this segment. However, management anticipates positive operating income for this segment in 2016, excluding the effects of marking to market derivative contracts, the company said.
Seaboard Corporation’s net earnings attributable to the company were $171 million, down 53.4% from $367 million in the same period of last year.
In the fourth quarter of 2015, Seaboard recorded interest income of $23 million, net of taxes ($31 million before taxes), or $19.49 per common share, for interest recognized on certain outstanding customer receivable balances in its Power segment. This interest income related to amounts determined to be collectible as of Dec. 31, 2015, but previously had been considered uncollectable in prior years. This amount was fully collected by Seaboard in January 2016.