Milling & Baking News - August 10, 2010 - 13

Financial Results



Bunge cuts e.p.s. guidance after
tough second quarter

per share

WHITE PLAINS, N.Y. - Bunge Ltd. down 14% from a close of $53.97 per
reduced its full-year earnings guid- share on July 28. By July 30 the stock
ance to $510 million to $550 million, or was trading at $49.65 per share.
In the second quarter, the Edible Oil
$3.25 to $3.50 per share, from $850 million to $930 million, or $5.30 to $5.80 Products segment suffered losses beper share, after disappointing second- fore interest and taxes of $13 million,
which compared with earnings before
quarter results.
Net sales for the quarter ended June interest and taxes (EBIT) of $10 million
30 were $10,974 million, which was in the previous year's second quarter.
comparable to $10,994 million in the Restructuring charges of $2 million,
previous year's second quarter.
Second-quarter net income of
Bunge share price
$1,778 million, or $11.25 per share,
actually was more than five times
$80
the previous year's second-quarter net income of $313 million,
$70
or $2.28 per share. The company,
however, reported a gain on the
$60
sale of fertilizer nutrients assets of
$2,440 million in this year's second
quarter. Bunge on May 27 closed
$50
on a transaction for cash proceeds
of $3.9 billion under which Vale, a
$40
global mining company based in
Aug.
Oct.
Dec.
Feb.
April
June
2009
2010
Brazil, acquired Bunge's fertilizer
nutrient assets in Brazil.
"The second quarter was disappoint- mostly related to the consolidation of
ing, due primarily to low volumes and Brazilian operations, adversely immargins in Agribusiness," said Alberto pacted results. Second-quarter sales
Weisser, chairman and chief executive increased 7% to $1,578 million from
officer, when results were given July 29. $1,472 million.
For Milling Products, second-quarter
"We expect significant improvement in
the second half of the year. In Agribusi- EBIT was $1 million, down from $14
ness, demand should be stronger and million in the previous year's second
Northern Hemisphere harvests will quarter. Higher corn milling results were
more than offset by lower wheat milling
contribute to new market conditions.
"Sugar and ethanol production will margins due to increased local competipeak as the harvest progresses and tion as a result of a large Brazilian wheat
sugar content yields improve, and fer- crop. Second-quarter sales increased 2%
tilizer will enter its seasonally strong to $386 million from $377 million.
For Agribusiness, second-quarter
period in the Southern Hemisphere."
Bunge Ltd. stock on the New York EBIT was $28 million, down from
Stock Exchange closed at $46.29 per $419 million in the previous year's
share on July 29, the day second- second quarter. Second-quarter results
quarter results were given, which was included $4 million of restructuring



North Dakota Mill achieves record profit

BISMARCK, N.D. - Profits of the North Dakota Mill and Elevator in fiscal 2010
were $13.18 million, which compared with a loss of $9.7 million in fiscal 2009 and a
loss of $822,000 in fiscal 2008.
The profit was more than double the mill's previous record of $6.2 million set
in 2006. North Dakota Mill said it has transferred 52.5% of the profit, including
$6,260,457 to the general fund and $658,995 to the agriculture fuel tax fund. The
remainder is to be used for the mill's operations.
"The major factors contributing to increased profits were a 13.2% increase in shipments, deferred gains from sales made in fiscal year 2009 and basis gains," said
Vance Taylor, mill manager.
Governor John Hoeven of North Dakota added North Dakota Mill set a record in
product shipments, with more than 23 million bus of grain milled and sold around
the world. MBN
14 / August 10, 2010 Milling & Baking News

charges related to the consolidation of
Brazilian operations. Second-quarter
sales dropped 6% to $7,406 million
from $7,902 million.
"Results in oilseed processing, grain
origination in distribution in all regions
were lower than those of an exceptionally strong period last year," Bunge said.
"Slow farmer selling, combined with
stronger-than-expected soybean export
demand from China and excess capacity in some regions, created a tight supply situation that pressured margins in
South America and the U.S."
Mr. Weisser, in a July 29
earnings conference call, said,
"Frankly, our commercial and
risk management strategies,
especially in oilseeds, had anticipated more balanced supply and demand in the quarter,
considering the record soybean
crops in South America. Fortunately, supply and demand
conditions in our markets are
always changing. Farmer selling has normalized, and the upcoming harvest in the Northern
Hemisphere will bring a new
market environment in the second half of the year."
For Sugar & Bioenergy, second-quarter EBIT was $4 million, down from $13
million. Second-quarter sales leaped
140% to $963 million from $402 million.
For Fertilizer, second-quarter EBIT
was $2,369 million, which compared
with losses before interest and taxes
of $53 million in the previous year's
second quarter. Higher fertilizer results were due to the gain of the sale of
the Brazilian fertilizer nutrients assets.
Second-quarter sales fell 24% to $641
million from $841 million.
Companywide for the six months
ended June 30, Bunge Ltd. had net
sales of $21,319 million, up 6% from
$20,192 million over the same time
period of the previous year. Six-month
net income was $1,841 million, up
from $118 million.
"Looking forward, U.S. crops are
progressing well with a potential for
record production of corn and soybeans, which would provide our
grain operations ample supplies to
originate, store and transport," said
Jackie Fouse, chief financial officer for
Bunge Ltd. "The global crushing environment is more challenging than
expected. However, farmer selling has
normalized, and better meat industry economics and oil demand from
the edible oil and biodiesel channels
should provide support for improved
conditions later in the year." MBN
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Milling & Baking News - August 10, 2010

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