Third-quarter profits at global agribusiness giant Bunge fell by 11% compared to the same period last year.
Earnings in the segment fell from US$528 million in the same quarter last year to US$472 million, the company announced on October 26.
Agribusiness volumes were 18.85 million tonnes compared to 19.62 million tonnes in the third quarter of 2022. Sales totaled US$10.08 billion, down from US$11.74 billion in the third quarter of the previous year.
“Adjusted agribusiness results…were down compared to last year as slightly higher performance in processing was more than offset by lower results in merchandising,” said Bunge Chief Financial Officer John W. Neppl, as cited by World Grain on Oct. 27, following a conference call with analysts the day before.
Bunge reports challenges and opportunities in results
“In processing, higher results in soybean origination in Brazil, Asia and North America were largely offset by results affected by the drought in Argentina. Results in Europe were in line with last year, as better performance in soft seeds was offset by lower results in soybean crushing.”
Adjusted earnings before interest and taxes (EBIT) in the Refined and Specialty Oils division was US$ 230 million, up from US$ 195 million recorded in the third quarter of 2022. Sales in the quarter were US$ 3.6 billion, below US$ 4.3 billion.
“The highest results for specialty refining oils were driven primarily by North America,” Neppl said. “Higher results in Asia, led by our India business, also contributed to the improved performance. The results in South America and Europe were lower.”
Bunge's overall net profit for the third quarter ended September 30 totaled US$373 million, below the US$380 million recorded in the same period last year.
Despite the slightly annual gains, Bunge raised its full-year 2023 adjusted earnings per share outlook to at least US$12.50, up from a previous forecast of US$11.75 per share issued in early August, due to the solid progress on growth initiatives and its pending merger with Viterra.
Growth trend and strategies
Following the publication of third quarter results, Bunge's share price rose to US$ 108.27 in midday trading on October 26. This represented an increase of 5.9% from the previous day's closing of US$ 102.18, as reported by World Grain.
Looking ahead, Bunge CEO Gregory A. Heckman said the merger with Viterra would drive long-term growth. Furthermore, this would occur with greater diversification in customers, assets, geographic regions and cultures.
“We have reached an important milestone in our strategic combination with Viterra. We obtained overwhelming shareholder support for the transaction. We hope to accelerate Bunge’s growth,” added Heckman.
In the agribusiness area, Bunge expects better results than the previous year due to processing. Furthermore, in the refined and special oils sector, better results are expected than last year's record.
In the nine-month period ending September 30, Bunge recorded a net profit of US$1.63 billion. This represents an increase of 28% from US$ 1.27 billion in the same period last year. Earnings per share also rose, from US$ 8.30 to US$ 10.71. Therefore, Bunge's outlook is optimistic, highlighting a promising future following this strategic merger with Viterra.
Source: Oils & Fats International
