April 29, 2011

Bunge's Q1 revenue triples on higher demand for US grain

High global crop prices boosted sales of Bunge Limited's grain merchandising division pushing its first quarter earnings to more than triple against last year.

The agribusiness company said net income for the quarter was US$232 million, or US$1.49 per share, compared to US$63 million, or US$0.31 per share, during the same period a year ago.

Revenue during the quarter jumped to US$12.19 billion, compared to US$10.35 billion during the same period a year before.

The results beat analysts' expectations for net income of US$1.26 per share on US$12.07 billion in revenue, according to a survey.

Like many agribusiness conglomerates, Bunge must deal with historically high grain prices. The company both sells and purchases huge amounts of grain, so it profits on the sales end but faces higher costs when it buys.

"The current market environment puts a premium on an efficient, flexible supply chain and excellent risk management," Bunge's CEO Alberto Weisser said.

Weisser said higher earnings were driven by Bunge's agribusiness division and higher prices for grain merchandising. The division also benefited from strong global demand for US and South American grain exports.

Income before interest and tax in the Agribusiness division rose to US$253 million in the first quarter, from US$122 million during the same period last year.

Shares of Bunge  fell US$1.16 to US$73.18 in afternoon trading.