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US agricultural commodities trader Bunge on Wednesday raised its outlook for full-year adjusted profit, after stronger-than-expected demand for its vegetable oils, bought by food and renewable fuel companies, drove a 41% jump in its quarterly revenue revenue.
The company's shares rose 3% in morning trading after the company projected full-year 2021 adjusted earnings of at least $8.50 per share, up from its previous estimate of about $7.50 per share.
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Bunge's results offer insight into how major global grain trading companies are emerging from the Covid-19 pandemic, which has caused major changes to the food and fuel chains as consumers cook more at home and avoid unnecessary travel .
Rising demand for vegetable oils from American foodservice companies and the renewable diesel sector is raising profit expectations at Bunge, Chief Executive Greg Heckman said. Demand for renewable benefits, in particular, has triggered a “structural improvement” in oilseed markets, he told analysts on a conference call.
Unlike other green fuels such as biodiesel, renewable diesel can power automotive engines without being blended with diesel derived from crude oil, making it a low-pollution option. Refineries can produce renewable diesel from animal fats, vegetable oils and used cooking oil.
“There will be more capacity needed to meet this growth in demand,” Heckman said.
The executive said in May that Bunge was working to extract more production from its existing oilseed crushing and refining operations to capitalize on growing demand for vegetable oils.
The balance also reflects a positive scenario reported by rival Archer Daniels Midland, which reported the day before a jump of almost 52% in its profits in the first quarter of the fiscal year. The rival had also previously revealed plans for a new oilseeds facility in the United States.
Adjusted profit in Bunge's vegetable oils segment rose 135% in the second quarter from a year earlier to $113 million. Adjusted profit at the largest agribusiness unit fell from last year, although net sales increased.
Total adjusted net income for the quarter rose to $2.61 per share from $1.88 a year earlier, beating analyst estimates for $1.62, according to Refinitiv IBES. Revenue of $15.391 billion beat Wall Street estimates for $11.583 billion.
Clipping: Notícias Agrícolas | Source: Reuters
