Bunge reports higher profits in fourth quarter

8 Feb 2023 | Eoin Hughes

US-based agricultural commodities trader Bunge Limited reported higher year-on-year profits for the fourth quarter.

In the core agribusiness unit, adjusted EBIT for the quarter was $592 million, down $3 million on the previous year’s last quarter.

Adjusted EBIT rose to $461 million in processing, driven by North America benefitting from the combination of large crops and strong meal and oil demand, although Europe was negatively hit by higher energy costs and lower volumes.

In the Milling segment, adjusted EBIT turned negative in the quarter and made a loss of $10 million.

Bunge said this was because low origination volume and high supply chain costs because of a small Argentine wheat crop which negatively hit local merchandising operations.

In Refined and Speciality Oils, the quarter’s adjusted EBIT rose year-on-year to $222 million on strong food and renewable fuel demand with notable improvements in Europe, Asia and South America.

The 2023 outlook for Bunge’s core agribusiness unit was that full year results would be down on 2022 as slightly higher results in Processing are more than offset by lower results in Merchandising.

But Bunge does see a potential boost to this outlook if strong demand and tight global commodity supplies go on throughout the year.

In Milling, full-year results are expected to be down from last year and in line with historical performance.

In Refined and Specialty Oils, full-year results are expected to be modestly down from the record in 2022.

“Over the course of the year, we made progress on executing our strategy to strengthen and expand our core business while positioning us to benefit over the long term from the growing demand for food, feed and renewable fuel”, said Greg Heckman, Bunge’s Chief Executive Officer.

“Looking ahead to 2023, we expect the favorable market environment we experienced last year to continue. With our critical position at the center of the global agribusiness supply chain, we remain well positioned to capitalize on the upside opportunities ahead of us”.

Bunge has forecast an adjusted EPS of at least $11 per share for the full year 2023.

Bunge also predicted for 2023 an adjusted annual effective tax rate in the range of 20% to 24%; net interest expense in the range of $380 to $410 million; capital expenditures in the range of $800 million to $1 billion; and depreciation and amortization of approximately $415 million.

Bunge reported an adjusted net income of $336 million for the fourth quarter, or $2.21 per share.

This was up from $231 million or $1.52 per share in the previous year’s quarter.

On an adjusted basis, excluding certain gains and charges and mark-to-market timing differences, share values equated to $3.24 for 2022, compared to $3.49 for 2021.

Full year results for 2022 were an adjusted net income of $1.6 billion, 10.51 per share, which was down 22.5% on the previous year.

For the full year, share values on an adjusted basis were $13.91, meeting the 2022 EPS forecast of $13.50.