Milling & Baking News - May 13, 2014 - 20

Financial Results 

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20 / May 13, 2014 Milling & Baking News

Bunge sustains first-quarter loss
of $27 million; EBIT down 77%
WHITE PLAINS, N.Y. - Sluggish generating overall returns at 2% above
results in its grain trading and distri- cost of capital in 2015."
Earnings before interest and tax in
bution business coupled with a depressed crushing environment in Chi- Bunge's Agribusiness sector totaled $79
na hurt agribusiness results at Bunge million in the first quarter, down 59%
Ltd., sending the White Plains-based from $191 million in the same period a
company to a loss of $27 million in the year ago. Net sales were virtually unfirst quarter ended March 31. The loss changed at $10,093 million, which comcompared with income of $170 mil- pared with $10,774 million a year ago.
"Our overall grain volume was in
lion, equal to $1.15 per share on the
common stock, in the same period a line with expectations, but we expected a lower price environment, particuyear ago.
Following the release of the results larly for wheat, which has not mateon May 1, the company's share price rialized," Mr. Schroder said. "Political
fell more than 5% to $75.09 in after- turmoil in the Black Sea and deterionoon trading, eventually closing at rating winter wheat conditions in the
U.S. were the primary catalysts for the
$75.34 for the day.
Net sales for the first quarter were weak rally, which ignored the more$13,461 million, down 9% from $14,785 than-adequate global stocks."
Milling Products EBIT fell 11% in the
million a year ago.
first quarter to $32 milTotal segment EBIT
lion from $36 million
during the quarter was
'We expect
while sales were flat at
$75 million, down 77%
significantly
$535 million.
from $323 million in
"In our wheat millthe first quarter of 2013.
higher results
ing business we did
With the inclusion of induring the rest
perform well in the
terest expense and taxes,
of the year.'
quarter," Drew Burke,
the company sustained
- Soren Schroder,
chief financial officer of
a loss for the quarter.
Bunge Ltd.
Bunge, said during the
The first-quarter reconference call. "Our
sults fell shy of expectations, but Soren Schroder, chief executive Brazilian business had strong results
officer of Bunge, in a May 1 conference on the back of very good margins. In
call with analysts painted an optimistic our Mexican business, both the acquisitions we made this year and in priorpicture of the future for the company.
"Agribusiness
should
perform year performed in line with expectawell," he said. "The global environ- tions and were profitable. Corn milling
ment is solid, with growth and trade in results were down slightly from where
demand for oilseeds and grains. Food they had historically been."
Edible Oil Products EBIT totaled $22
and ingredients, which performed as
expected in the first quarter, should million in the quarter, down sharply
demonstrate sequential improvements from $38 million a year ago. Net sales
throughout the year and deliver anoth- also declined, falling 16% to $1,928
er record result. And despite the weak million from $2,297 million.
In Sugar and Bioenergy, Bunge susstart in sugar and bioenergy, we project
that we will reach break-even to slight- tained a loss of $64 million, which
ly positive EBIT for the year, and fund compared with EBIT of $23 million a
year ago. Net sales were $844 million,
all segment CapEx from operations.
"The strategic review of the sugar down 24% from $1,113 million.
"Most of the variance in sugar envimilling business is progressing, and
options lie ahead to improve our po- ronment was related to mark-to-market
sition in this segment and returns for losses and industrial hedges," Mr. Schshareholders. Overall, we are confi- roder said. "We had and still have the
dent that on a combined basis, agri- view that global sugar is over-supplied
business and food and ingredients for the next year. And we locked in sugwill generate a 2014 return on invested ar places ahead of time, resulting in a
capital at 1.5 percentage points above negative mark-to-market of $31 million
our weighted average cost of capital of as sugar futures moved higher during
7%. So we expect significantly higher the quarter. Much of these losses will
results during the rest of the year, par- reverse throughout the year. Our global
ticularly in the second half. There is trading business also had a slow start
no change to our stated objective of to the year, but is now back on track." MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - May 13, 2014

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