MERRIAM, KAS. — Seaboard Corp. invested $31 million in its Commodity Trading and Milling unit during the first quarter of fiscal 2016, including $29 million for the construction of two dry bulk vessels. The company plans to spend another $29 million on the segment during the remainder of fiscal 2016, primarily for a new wheat mill in Zambia and other improvements to existing facilities and related equipment.
Operating income in the company’s Commodity Trading and Milling unit totaled $9 million in the first quarter ended April 2, up from $4 million in the same period a year ago. The increase primarily reflected higher margins on commodity trades to third parties, Seaboard said. The increase also reflected fluctuations of $9 million of mark-to-market derivative contracts. Excluding the effects of mark-to-market adjustments for derivatives contracts, operating income increased $14 million.
Net sales, meanwhile, decreased 14% to $709 million from $820 million.
“The decrease primarily reflected lower sales prices and the mix of products sold, partially offset by higher volumes in corn, soybean meal and wheat,” Seaboard said.Overall, net income attributable to Seaboard shareholders in the first quarter was $54 million, equal to $45.91 per share on the common stock, up 64% from $33 million, or $28.11 per share, in the same period a year ago. Net sales totaled $1,319 million, down 9% from $1,452 million.