July 27, 2007

Bunge reports 460 percent increase net income 2Q 2007

Bunge Limited announced on July 26 that its second quarter 2007 net income rose to 460 percent to US$168 million compared to US$30 million last year.

In the six months ended June 30, 2007, commodity prices increased due to cash flow used by operations increasing to US$776 million from US$400 million in the same period last year.

Bunge's agribusiness sector had a strong quarter compared to a loss in the same period last year due to improved oilseed processing margins and strong international marketing results. The company said its risk management strategies worked well, and recovered a portion of the mark-to-market losses incurred in the first quarter on our agricultural commodity inventories and forward purchase contracts.

However, edible oils sector declined primarily due to weaker performance in Europe, which was negatively impacted by higher raw material costs that were difficult to pass on to customers and higher sales and marketing expenses. In Brazil, stronger packaged oil results were driven by higher volumes and margins.

Lower results in the quarter for Bunge's milling products sector were due to higher raw material and operating costs in wheat milling, the company said.

Alberto Weisser, chairman and chief executive officer, has issued this statement: "We are optimistic about the second half of 2007 and our opportunities in 2008. While futures prices for soybeans and grains have been volatile, industry fundamentals are solid. Demand for protein meal and vegetable oil continues to grow. However, in some cases it has been difficult to pass higher edible oil prices on to customers. We expect good global harvests, with some exceptions in Europe, and large crop plantings in South America.

"High futures prices and acreage shifts in favor of corn in the United States reflect the influence of current and expected demand from the biofuels industry. Higher prices are beneficial for farmers worldwide and are particularly important in Brazil, where they have largely offset the negative impacts of a stronger local currency and increased crop input costs. While soybean farmers in that country continue to face high debt levels and operating costs, the market is helping to return them to better levels of profitability. This has been reflected in the increased demand for fertilizer seen in the first half of this year.

"We expect solid performances in the second half of the year in our agribusiness and fertilizer segments, which should more than offset weaker results in edible oils. Agribusiness should continue to benefit from good industry fundamentals. Strong margins should lead to a good second-half performance in fertilizer, although the traditional increase in sales volumes will likely be moderated due to the level of forward purchasing which occurred in the second quarter".