|
Bunge Reports
$289 Million First-Quarter Net Income, 1,964% Higher than First-Quarter
2007
White Plains, NY—Bunge
Limited (NYSE:BG) announced April 23 its first-quarter 2008 earnings.
• Total segment EBIT
increased by $390 million when compared to the same quarter last year
• Agribusiness benefited
from strong global demand for agricultural products with volume up 6%
in the quarter
• Fertilizer benefited
from strong demand and rising international prices
• The Company is increasing
its full year 2008 net income guidance by $150 million
Overview
Alberto Weisser,
Bunge’s Chairman and Chief Executive Officer stated, “In
the first quarter, Bunge capitalized on strong global market conditions
and generated outstanding operating results.
“It is a unique time
in the global agribusiness and food industry.
"High commodity and
fertilizer prices reflect the fact that global demand for key commodities
and products is very strong.
"For example, the USDA
estimates world demand for soybean meal will rise nearly 6 percent this
year.
"Higher crop prices,
which should continue in the near-term, and a large local harvest are
helping to improve the profitability of Brazilian farmers.
“A volatile, high price
environment presents some challenges, however.
"It creates demands
on working capital and leads to inflationary pressures that can influence
national policy decisions.
"And though farmers
are generally benefiting from higher crop prices, their profitability
depends on the relationship between these prices and those of agricultural
inputs, such as fertilizer, which are rising.
“In this environment,
effective risk management and a global business that mitigates exposure
to any one region, while providing the ability to navigate market dislocations,
are essential. So too is efficient management of working capital.
“Bunge possesses these
strengths, and we will build upon them through continued strategic capital
investments while managing our business according to the demands of
today’s market.”
FIRST QUARTER RESULTS
Agribusiness
Agribusiness had a strong
quarter compared to a loss in the same period last year.
Results benefited from higher
oilseed crushing margins in all geographies, as well as stronger distribution
results.
Despite high agricultural
commodity prices, demand remained firm.
Our risk management strategies
worked well during a volatile period, and our global asset network provided
us with the means to successfully manage through the farmer strikes
in Argentina.
Equity in earnings of affiliates
increased in the quarter due to higher results at Diester Industries
International, our European biodiesel joint-venture.
Fertilizer
Higher volumes and margins
led to the strong performance in fertilizer.
The increase in volumes was
driven by product sales for soybean plantings, which historically are
purchased in the second half of the year.
Soybean farmers accelerated
purchases because of favorable agricultural commodity prices and concerns
about increasing crop input costs.
Margins benefited from rising
international fertilizer prices which more than offset higher raw material
costs.
Selling prices in South America
are based on 3 international prices and include the cost of transportation
and other import costs.
Minority interest increased
in the quarter due to higher results at Fosfertil.
Edible Oil Products
Results improved in Europe
primarily due to price increases in certain markets which helped offset
higher raw material costs.
Our Brazilian business also
performed well during the quarter benefiting from higher margins.
Equity in earnings of affiliates
increased in the quarter due to higher results at Saipol, our European
packaged oil jointventure.
Milling Products
Weaker results were largely
due to increased competition and higher operating costs in wheat milling.
Outlook
Jacqualyn Fouse,
Chief Financial Officer, stated, “Considering the strong start
to the year, and that we should continue to benefit from the good fundamentals
in our industry, we are increasing our 2008 full-year net income guidance
by $150 million to $980 million to $1.02 billion, or $7.10 to $7.40
per share.
"This guidance assumes
an effective tax rate range of 24-28%.
"This fully diluted
per share guidance is based on an estimated weighted average of 138
million shares outstanding, which includes assumed dilution relating
to our convertible preference shares.”
For more information, call
914-684-3398.
For a copy of the full Bunge
First-Quarter Report, click
here.
|