February 5, 2010

Bunge ends 2009 with disappointing results

 

For the year ended December 31, Bunge's net income dropped 66% to US$361 million, hurt by high-cost inventory and a weak price environment.

Sales totalled US$41.93 billion, a 20% drop on the previous year. Bunge managed to narrow its loss for the fourth quarter to US$28 million, compared to the year-ago loss of US$210 million.
 

Alberto Weisser, Bunge's chairman and CEO said Bunge's earnings in the fourth quarter represent a disappointing end to a mixed and challenging year for the company. In 2009, fertiliser generated significant losses, which stemmed from a difficult market characterised by high-cost inventory and a weak price environment.
 

The firm however, remained optimistic for the remainder of the year.

Bunge has made investments in its core businesses by starting construction on an export grain elevator in the US and a soy processing plant in Vietnam, and by acquiring Raisio's margarine businesses in Finland and Poland. These additions are expected to boost Bunge's ability to supply growing markets in Asia and tap into new markets in Europe, while improving the company's overall efficiency.

Bunge has also acquired the Argentine fertiliser business of Petrobras, which expanded its product portfolio in Argentina, said Weisser. The agreement to acquire Moema will also contribute significantly to Bunge's top and bottom lines in 2010, he said.

The company will also sell its fertiliser nutrients assets, which will provide the financial flexibility to redeploy capital in Bunge's core businesses and in complementary value chains where there are opportunities.

Bunge has consolidated responsibility for raw material sourcing and end product sales, and is working to reduce lead times on purchases and adjust the cost structure.

"2010 should be a good year for Bunge, with solid performances from our businesses. We will continue to focus on our strategy and seek to generate greater shareholder value by building on our global asset network and leveraging our commercial, logistics and risk management expertise across greater volumes and more products," said Weisser.