July 25, 2008

Bunge quadruples Q2 profits, beats expectations

Profits at Bunge, the world's biggest oilseed processor, more than quadrupled in the second quarter from the same period last year, thanks to record grain prices and a jump in fertiliser sales.

Profits in the second quarter rose to US$751 million or US$5.45 per share, up from US$168 million, or US$1.30 per share a year earlier. Even excluding US$142 million of extraordinary items included in the headline numbers, Bunge earned US$4.73 per share, more than double analysts' average forecasts of about US$2.31 per share.

Revenues rose by 73 percent to US$14.4 billion, ahead of Wall Street's expectations of about US$13.2 billion. The company also raised its forecast for 2008 earnings for the second time this year, to US$11.60-US$11.90 per share from US$7.10-US$7.40.

Bunge's fertiliser made up more than half of this quarter's gross profit, reaching US$521 million, more than triple from US$157 million in the same period last year.

Alberto Weisser, Bunge chairman and chief executive said the last four quarters have been a unique and challenging time for the food and agribusiness industry.

Weisser said as developing countries shift their diet away from grains to meat, there would be bigger need for fertiliser. This meant a strong market for the product this year and next, he added.

Growth rates like those seen in this year would slow however.

"This one was an exceptional year. I don't think we can repeat quarters like this," he said.

Bunge last month bought over Corn Products International in a US$4.8 billion deal.