October 26, 2007

 

Bunge's third quarter net income doubles to US$351 million

 

 

Bunge Limited announced on Thursday (October 25, 2007) that its net income rose 108 percent over the same quarter last year to US$351 million.

 

Calling the results "exceptional", Alberto Weisser, chairman and chief executive officer, said that the company's agribusiness operations improved across the board, and fertiliser continued to perform strongly.

 

The company's oilseed processing, grain origination and distribution businesses performed well across a variety of regions and commodities, thanks to the broad geographic footprint and product portfolio built up in recent years, he said. These were coupled with good risk management decisions in a dynamic market, and more integration, he added.

 

Weisser added that the sector has recently seen a temporary shift from food products to agribusiness. Having an integrated business that stretches from farm to retail shelf enables Bunge to capture value on the supply chain at numerous points.

 

Bunge is also expanding from its grain dominated products into new areas such as sugar.

 

The company this month acquired its first sugarcane mill and ethanol plant in Brazil. The acquisition marked an important step in the company's strategy to become a global and fully integrated player in the sugar value chain, he said.

 

Bunge's agribusiness sector saw improved performances in Europe and South America driven by higher grain origination and oilseed processing margins while its North American operations benefited from strong grain export volume.

 

Distribution results improved due to strong global demand and improved margins.

 

However, Bunge's edible oil results were affected by higher operating expenses, which include investments to grow the business in Europe and Asia, where volumes and margins have not yet reached the critical mass level.

 

Margins in Europe were negatively impacted by high raw material costs, but were partly offset by margin improvements in other parts of the world.

 

The company's milling sector's higher results in the quarter were mainly due to increased volume and improved product mix in corn milling.

 

Fourth-quarter results should be solid as agribusiness and fertilizer continue to benefit from good industry fundamentals, Jacqualyn Fouse, chief financial officer, said, adding that the trend is expected to continue into 2008.

 

In consideration of this outlook, the company is increasing its 2007 full-year net income guidance by US$60 million to US$690 million to US$710 million.