WHITE PLAINS, N.Y.,
April 28, 2011 /PRNewswire/ -- Bunge
Limited (NYSE: BG)
- Total segment EBIT of $317
million, up $199 million vs.
2010
- Strong performance in agribusiness and food &
ingredients
- Sugar & bioenergy and fertilizer results generally in
line with expectations
Financial Highlights
|
|
|
Quarter
Ended
|
|
|
US$ in
millions, except per share data
|
3/31/11
|
3/31/10
|
|
|
|
Volume (000
metric tons)
|
29,284
|
31,923
|
|
|
|
Net
sales
|
$12,194
|
$10,345
|
|
|
|
Total
segment EBIT (a)
|
$317
|
$118
|
|
|
|
Agribusiness
|
$253
|
$122
|
|
|
|
Sugar &
Bioenergy
|
$2
|
$5
|
|
|
|
Edible Oil
Products
|
$34
|
$18
|
|
|
|
Milling
Products
|
$33
|
$13
|
|
|
|
Fertilizer
|
$(5)
|
$(40)
|
|
|
|
Net income
attributable to Bunge
|
$232
|
$63
|
|
|
|
Earnings per
common share-diluted
|
$1.49
|
$0.31
|
|
|
|
(a) Total
segment earnings before interest and tax ("EBIT") is a non-GAAP
financial measure. A reconciliation to the most directly comparable
U.S. GAAP measure is included in the tables attached to this press
release and the accompanying slide presentation posted on Bunge's
website, respectively.
|
|
|
|
|
|
|
Overview
Alberto Weisser, Bunge's Chairman
and Chief Executive Officer, stated, "Bunge is off to a strong
start in 2011. Agribusiness and food & ingredients
performed very well in the first quarter and sugar & bioenergy
and fertilizer produced segment results generally in line with our
expectations. The Brazilian sugarcane harvest is getting
underway now, and all eight of our mills should be operating next
week.
"The agribusiness and food markets continue to be characterized
by tight supply and volatility, resulting from a combination of
factors, including weather and trade policy. While current
conditions are likely to persist throughout the year, farmers
around the world are responding to higher commodity prices with
large plantings and ample use of crop inputs. South American
harvests are near record levels and, weather permitting, U.S.
farmers are expected to plant the largest acreage of major crops in
nearly 25 years. Another season of large harvests will be an
important step in rebuilding stocks and moderating prices.
"The current market environment puts a premium on an efficient,
flexible supply chain and excellent risk management. These are some
of Bunge's key strengths which allow us to deliver reliable service
to customers and generate value for shareholders."
First Quarter Results
Agribusiness
Higher results in the quarter were primarily due to strong
performance in grain merchandising, which benefited from strong
global demand for U.S. and South American exports. Results in
oilseed processing were lower, due to weaker volumes and margins.
Lower volume in the quarter was primarily due to reduced
European grain origination and softseed processing volumes
resulting from the smaller 2010 crops in the Black Sea region.
First quarter 2010 results included $14 million of impairment and restructuring
charges.
Sugar & Bioenergy
The first quarter is the inter-harvest period in Brazil when sugarcane mills in the
Center-South region are not operating and are selling sugar and
ethanol inventories from the previous cane harvest. High
prices in the quarter were offset by low volumes due to the impact
of dry weather on sugarcane yields in Brazil last year. First quarter 2010
results included $11 million of
transaction-related expenses in connection with the Moema
acquisition.
Edible Oil Products
Strong results in Europe and
North America were partially
offset by lower results in our margarine business, which
experienced aggressive competition.
Milling Products
Higher results in the quarter were due to stronger margins in
wheat and corn milling, as well as the contribution of our U.S.
rice milling business, which we acquired in the fourth quarter of
2010. Wheat milling benefited from the combination of high
local sales prices and low raw material costs, as much of our
inventory was purchased prior to the rise in global wheat prices.
First quarter 2010 results included $3
million of impairment and restructuring charges.
Fertilizer
First quarter is typically a low-volume period due to the
seasonality of the South American planting season, which mostly
occurs in the second half of the year. In the quarter,
volumes were generally in line with expectations and margins were
higher due to tight industry inventory levels in Brazil. Results in first quarter 2010
include operating results from our Brazilian nutrients business
that we sold.
Financial Costs
Interest expense decreased in the quarter due to lower average
interest rates on debt.
Income Taxes
The effective tax rate for the quarter ended March 31, 2011 was 15 percent compared to 10
percent for the same period last year.
Cash Flow
Cash provided by operations in the quarter ended March 31, 2011 was $734
million compared to cash provided by operations of
$760 million in the same period last
year.
Outlook
Drew Burke, Chief Financial
Officer, stated, "In agribusiness, the favorable environment for
our grain merchandising business should continue. Global
demand is good and farmers around the world are responding to high
agricultural commodity prices by increasing crop production.
Oilseed processing margins in South
America should benefit from higher utilization now that
harvest is underway. Margins in Europe should improve later in the year when
stocks are replenished during harvest. However, margins in
the U.S. are likely to remain under pressure due to excess
capacity.
"In sugar & bioenergy, tight global sugar supplies and
strong demand for ethanol in Brazil should continue to be supportive of
prices.
"Food & ingredients should continue to perform well.
However, pricing pressures in edible oils will likely persist
in certain markets, and wheat milling margins will likely decrease
as low-cost raw material inventories are replaced at market prices.
"In fertilizer, strong farm economics should result in increased
plantings and demand for fertilizer.
"Results in our fertilizer and sugar & bioenergy segments
will be weighted to the second half of the year due to the
seasonality of the businesses."
Conference Call and Webcast Details
Bunge Limited's management will host a conference call at
10:00 a.m. EDT on April 28, 2011 to discuss the company's
results.
A slide presentation to accompany the discussion of results will
be posted in the "Investor Information" section of
www.bunge.com.
To listen to the call from within the U.S., dial 888-895-5479.
From outside the U.S. or Canada, dial 847-619-6250. When
prompted, enter confirmation code 29553381. The call will
also be webcast live at www.bunge.com.
To access the webcast, select the "Investor Information" link on
the Bunge homepage, then select "Webcasts and News Alerts."
Select "Q1 2011 Bunge Limited Conference Call" and follow the
prompts.
A replay of the call will be available later in the day on
April 28, 2011, continuing through
May 28, 2011. To listen to the
replay from within the U.S., dial 888-843-7419. From outside
the U.S. or Canada, dial
630-652-3042. When prompted, enter confirmation code
29553381. A replay will also be available on the company's
website. To access it, select the "Investor Information" link
on the Bunge homepage, then select "Audio Archives" and follow the
prompts.
About Bunge Limited
Bunge Limited (www.bunge.com, NYSE: BG) is a leading global
agribusiness and food company with approximately 32,000 employees
in more than 30 countries. Bunge buys, sells, stores and transports
oilseeds and grains to serve customers worldwide; processes
oilseeds to make protein meal for animal feed and edible oil
products for commercial customers and consumers; produces sugar and
ethanol from sugarcane; mills wheat and corn to make ingredients
used by food companies; and sells fertilizer in North and
South America. Founded in 1818,
the company is headquartered in White
Plains, New York.
Cautionary Statement Concerning Forward-Looking
Statements
This press release contains both historical and forward-looking
statements. All statements, other than statements of historical
fact are, or may be deemed to be, forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are not based on
historical facts, but rather reflect our current expectations and
projections about our future results, performance, prospects and
opportunities. We have tried to identify these forward-looking
statements by using words including "may," "will," "should,"
"could," "expect," "anticipate," "believe," "plan," "intend,"
"estimate," "continue" and similar expressions. These
forward-looking statements are subject to a number of risks,
uncertainties and other factors that could cause our actual
results, performance, prospects or opportunities to differ
materially from those expressed in, or implied by, these
forward-looking statements. The following important factors, among
others, could affect our business and financial performance:
industry conditions, including fluctuations in supply, demand and
prices for agricultural commodities and other raw materials and
products used in our business; fluctuations in energy and freight
costs and competitive developments in our industries; the effects
of weather conditions and the outbreak of crop and animal disease
on our business; global and regional agricultural, economic,
financial and commodities market, political, social and health
conditions; the outcome of pending regulatory and legal
proceedings; our ability to complete, integrate and benefit from
acquisitions, dispositions, joint ventures and strategic alliances;
our ability to achieve the efficiencies, savings and other benefits
anticipated from our cost reduction, margin improvement and other
business optimization initiatives; changes in government policies,
laws and regulations affecting our business, including agricultural
and trade policies, tax regulations and biofuels legislation; and
other factors affecting our business generally. The forward-looking
statements included in this release are made only as of the date of
this release, and except as otherwise required by federal
securities law, we do not have any obligation to publicly update or
revise any forward-looking statements to reflect subsequent events
or circumstances.
Additional Financial Information
The following table provides a summary of certain gains and
charges that may be of interest to investors. The table
includes a description of these items and their effect on total
segment EBIT, income from operations before income tax, net income
attributable to Bunge and earnings per share for the quarter ended
March 31, 2011 and 2010.
|
|
(In
millions, except per share data)
|
Total
Segment
EBIT
|
Income
From
Operations
Before
Income
Tax
|
Net
Income
Attributable
to
Bunge
|
Earnings
Per
Share
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March
31:
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Impairment and
Restructuring
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (1)
|
$
|
-
|
$
|
(22)
|
$
|
-
|
$
|
(22)
|
$
|
-
|
$
|
(14)
|
$
|
-
|
$
|
(0.10)
|
|
Acquisition Related Expenses
(2)
|
|
-
|
|
(11)
|
|
-
|
|
(11)
|
|
-
|
|
(7)
|
|
-
|
|
(0.05)
|
|
Total
|
$
|
-
|
$
|
(33)
|
$
|
-
|
$
|
(33)
|
$
|
-
|
$
|
(21)
|
$
|
-
|
$
|
(0.15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Statements of Income (Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
March
31,
|
|
(In millions, except per share
data)
|
|
2011
|
|
2010
|
|
Net sales
|
$
|
12,194
|
$
|
10,345
|
|
Cost of goods sold
|
|
(11,555)
|
|
(9,800)
|
|
Gross profit
|
|
639
|
|
545
|
|
Selling, general and
administrative expenses
|
|
(344)
|
|
(347)
|
|
Interest income
|
|
21
|
|
19
|
|
Interest expense (3)
|
|
(72)
|
|
(78)
|
|
Foreign exchange gains
(losses)
|
|
42
|
|
(50)
|
|
Other income (expense) −
net
|
|
(8)
|
|
-
|
|
Income from operations before
income tax and equity earnings of affiliates
|
|
278
|
|
89
|
|
Income tax expense
|
|
(43)
|
|
(9)
|
|
Equity in earnings of
affiliates
|
|
-
|
|
-
|
|
Net income
|
|
235
|
|
80
|
|
Net income attributable to
noncontrolling interest
|
|
(3)
|
|
(17)
|
|
Net income attributable to
Bunge
|
|
232
|
|
63
|
|
Convertible preference share
dividends
|
|
(8)
|
|
(19)
|
|
Net income available to Bunge
common shareholders
|
$
|
224
|
$
|
44
|
|
Earnings per common share –
diluted (4):
|
|
|
|
|
|
Earnings to Bunge common
shareholders
|
$
|
1.49
|
$
|
0.31
|
|
Weighted–average common shares
outstanding – diluted (4)
|
|
155,647,491
|
|
141,286,541
|
|
|
|
|
|
|
|
|
|
|
Consolidated Segment Information
(Unaudited)
|
|
Set forth below is a summary of
certain items in our condensed consolidated statements
of
|
|
income and volumes by reportable
segment.
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
March
31,
|
|
(In millions, except
volumes)
|
2011
|
2010
|
|
Volumes (in thousands of
metric tons):
|
|
|
|
|
|
Agribusiness
|
|
24,211
|
|
25,138
|
|
Sugar & Bioenergy
|
|
1,438
|
|
1,763
|
|
Edible oil products
|
|
1,410
|
|
1,439
|
|
Milling products
|
|
1,243
|
|
1,284
|
|
Fertilizer
|
|
982
|
|
2,299
|
|
Total
|
|
29,284
|
|
31,923
|
|
Net sales:
|
|
|
|
|
|
Agribusiness
|
$
|
8,123
|
$
|
6,645
|
|
Sugar & Bioenergy
|
|
1,061
|
|
1,025
|
|
Edible oil products
|
|
2,016
|
|
1,573
|
|
Milling products
|
|
500
|
|
403
|
|
Fertilizer
|
|
494
|
|
699
|
|
Total
|
$
|
12,194
|
$
|
10,345
|
|
Gross profit:
|
|
|
|
|
|
Agribusiness
|
$
|
407
|
$
|
329
|
|
Sugar & Bioenergy
|
|
32
|
|
22
|
|
Edible oil products
|
|
114
|
|
99
|
|
Milling products
|
|
57
|
|
34
|
|
Fertilizer
|
|
29
|
|
61
|
|
Total
|
$
|
639
|
$
|
545
|
|
Selling, general and
administrative expenses:
|
|
|
|
|
|
Agribusiness
|
$
|
(177)
|
$
|
(168)
|
|
Sugar & Bioenergy
|
|
(38)
|
|
(29)
|
|
Edible oil products
|
|
(74)
|
|
(76)
|
|
Milling products
|
|
(28)
|
|
(22)
|
|
Fertilizer
|
|
(27)
|
|
(52)
|
|
Total
|
$
|
(344)
|
$
|
(347)
|
|
Foreign exchange gain
(loss):
|
|
|
|
|
|
Agribusiness
|
$
|
34
|
$
|
(41)
|
|
Sugar & Bioenergy
|
|
11
|
|
9
|
|
Edible oil products
|
|
(1)
|
|
(2)
|
|
Milling products
|
|
-
|
|
-
|
|
Fertilizer
|
|
(2)
|
|
(16)
|
|
Total
|
$
|
42
|
$
|
(50)
|
|
Segment earnings before interest
and tax:
|
|
|
|
|
|
Agribusiness
|
$
|
253
|
$
|
122
|
|
Sugar & Bioenergy
|
|
2
|
|
5
|
|
Edible oil products
|
|
34
|
|
18
|
|
Milling products
|
|
33
|
|
13
|
|
Fertilizer
|
|
(5)
|
|
(40)
|
|
Total (5)
|
$
|
317
|
$
|
118
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheets (Unaudited)
|
|
|
|
|
|
|
|
|
March
31,
|
December
31,
|
|
(In millions)
|
2011
|
2010
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
812
|
$
|
578
|
|
Trade accounts
receivable
|
|
3,138
|
|
2,901
|
|
Inventories (6)
|
|
6,719
|
|
6,635
|
|
Other current assets
(7)
|
|
5,234
|
|
5,701
|
|
Total current
assets
|
|
15,903
|
|
15,815
|
|
Property, plant and equipment,
net
|
|
5,564
|
|
5,312
|
|
Goodwill and other intangible
assets, net
|
|
1,182
|
|
1,120
|
|
Investments in
affiliates
|
|
605
|
|
609
|
|
Other non-current
assets
|
|
3,219
|
|
3,145
|
|
Total assets
|
$
|
26,473
|
$
|
26,001
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
Short-term debt
|
$
|
1,018
|
$
|
1,718
|
|
Current portion of long-term
debt
|
|
629
|
|
612
|
|
Trade accounts
payable
|
|
4,033
|
|
3,637
|
|
Other current
liabilities
|
|
3,676
|
|
4,037
|
|
Total current
liabilities
|
|
9,356
|
|
10,004
|
|
Long-term debt
|
|
3,041
|
|
2,551
|
|
Other non-current
liabilities
|
|
971
|
|
892
|
|
Total equity
|
|
13,105
|
|
12,554
|
|
Total liabilities and
shareholders' equity
|
$
|
26,473
|
$
|
26,001
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Statements of Cash Flows (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
March
31,
|
|
(In millions)
|
2011
|
|
|
2010
|
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
|
$
|
235
|
|
|
$
|
80
|
|
Adjustments to reconcile net
income to cash used for operating activities:
|
|
|
|
|
|
|
|
Foreign exchange (gain) loss on
debt
|
|
(43)
|
|
|
|
93
|
|
Depreciation, depletion and
amortization
|
|
104
|
|
|
|
102
|
|
Other, net
|
|
1
|
|
|
|
(6)
|
|
Changes in operating assets and
liabilities, excluding the effects of acquisitions:
|
|
|
|
|
|
|
|
Trade Accounts
Receivable
|
|
(212)
|
|
|
|
(380)
|
|
Inventories
|
|
40
|
|
|
|
632
|
|
Trade Accounts
Payable
|
|
355
|
|
|
|
434
|
|
Other, net
|
|
254
|
|
|
|
(195)
|
|
Cash provided by operating
activities
|
|
734
|
|
|
|
760
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Payments made for capital
expenditures
|
|
(207)
|
|
|
|
(287)
|
|
Acquisitions of businesses (net
of cash acquired)
|
|
(62)
|
|
|
|
(133)
|
|
Proceeds from sale of property,
plant and equipment and investments
|
|
5
|
|
|
|
54
|
|
Other, net
|
|
(18)
|
|
|
|
(15)
|
|
Cash used for investing
activities
|
|
(282)
|
|
|
|
(381)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Net borrowings (payments) of
short-term debt
|
|
(726)
|
|
|
|
(308)
|
|
Proceeds from long-term
debt
|
|
711
|
|
|
|
129
|
|
Repayment of long-term
debt
|
|
(221)
|
|
|
|
(107)
|
|
Proceeds from sale of common
shares
|
|
12
|
|
|
|
1
|
|
Dividends paid
|
|
(48)
|
|
|
|
(49)
|
|
Other
|
|
42
|
|
|
|
13
|
|
Cash used for financing
activities
|
|
(230)
|
|
|
|
(321)
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
|
12
|
|
|
|
-
|
|
Net increase in cash and cash
equivalents
|
|
234
|
|
|
|
58
|
|
Cash related to assets held for
sale (8)
|
|
-
|
|
|
|
(138)
|
|
Cash and cash equivalents,
beginning of period
|
|
578
|
|
|
|
553
|
|
Cash and cash equivalents, end
of period
|
$
|
812
|
|
|
$
|
473
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures
This earnings release contains certain "non-GAAP financial
measures" as defined in Regulation G of the Securities Exchange Act
of 1934. Bunge has reconciled these non-GAAP financial
measures to the most directly comparable U.S. GAAP measures below.
These measures may not be comparable to similarly titled
measures used by other companies.
Total segment EBIT
Total segment EBIT is consolidated net income attributable to
Bunge excluding interest income and expense and income tax
attributable to each segment.
Total segment EBIT is a non-GAAP financial measure and is not
intended to replace net income attributable to Bunge, the most
directly comparable GAAP financial measure. Total segment
earnings before interest and tax (EBIT) is an operating performance
measure used by Bunge's management to evaluate its segments'
operating activities. Bunge's management believes total
segment EBIT is a useful measure of its segments' operating
profitability, since the measure allows for an evaluation of
segment performance without regard to its financing methods or
capital structure. In addition, EBIT is a financial measure
that is widely used by analysts and investors in Bunge's
industries. Total segment EBIT is not a measure of
consolidated operating results under U.S. GAAP and should not be
considered as an alternative to net income or any other measure of
consolidated operating results under U.S. GAAP.
Below is a reconciliation of total segment EBIT to net income
attributable to Bunge:
|
|
|
Quarter
Ended
|
|
|
March
31,
|
|
(In millions)
|
2011
|
2010
|
|
Total segment EBIT
|
$
|
317
|
$
|
118
|
|
Interest income
|
|
21
|
|
19
|
|
Interest expense
|
|
(72)
|
|
(78)
|
|
Income tax expense
|
|
(43)
|
|
(9)
|
|
Noncontrolling interest share of
interest and tax
|
|
9
|
|
13
|
|
Net income attributable to
Bunge
|
$
|
232
|
$
|
63
|
|
|
|
|
|
|
|
|
Notes
|
|
(1)
|
Pretax impairment charges
recorded in cost of goods sold in the quarter ended March 31, 2010
primarily consisted of $9 million in the agribusiness segment
related to the closure of an older, less efficient U.S. oilseed
processing facility and $2 million in the milling products segment
related to the closure of a co-located corn oil extraction
line.
|
|
|
Pretax restructuring charges in
cost of goods sold for the quarter ended March 31, 2010 related to
termination benefit costs in the U.S. and Brazil ($5 million in the
agribusiness segment, $1 million in the sugar and bioenergy
segment, $4 million in the fertilizer segment, and $1 million
in the milling segment).
|
|
(2)
|
In the quarter ended March 31,
2010, Bunge acquired a 100% ownership interest in five sugar mills
in Brazil and recorded pretax acquisition costs of $11 million in
selling, general and administrative expenses.
|
|
(3)
|
Includes interest expense on
readily marketable inventories of $28 million and $13 million for
quarters ended March 31, 2011 and 2010, respectively.
|
|
(4)
|
Weighted-average common shares
outstanding-diluted for the quarter ended March 31, 2011 exclude
the dilutive effect of 2 million of outstanding stock options and
contingently issuable restricted stock units because the effect of
conversion would not have been dilutive. Weighted-average
common shares outstanding-diluted for the quarter ended March 31,
2011 includes the dilutive effect of 7.5 million weighted average
common shares that would be issuable upon conversion of Bunge's
convertible preference shares.
|
|
|
Weighted-average common shares
outstanding-diluted for the quarter ended March 31, 2010 excludes
the dilutive effect of approximately 3 million outstanding stock
options and contingently issuable restricted stock units because
the effect of the conversion would not have been dilutive.
Weighted-average common shares outstanding-diluted for the
quarter ended March 31, 2010 also excludes the dilutive effect of
approximately 14.6 million weighted average common shares that
would be issuable upon conversion of Bunge's convertible preference
shares because the effect of the conversion would not have been
dilutive.
|
|
(5)
|
See Reconciliation of Non-GAAP
Measures.
|
|
(6)
|
Includes readily marketable
inventories of $4,529 million and $4,851 million at March 31, 2011
and December 31, 2010, respectively.
|
|
(7)
|
Includes marketable
securities of $41 million and $39 million at March 31, 2011 and
December 31, 2010, respectively.
|
|
(8)
|
In January 2010, Bunge entered
into a definitive agreement (as amended, the Agreement) with Vale
S.A., a Brazil-based global mining company (Vale), pursuant to
which Vale acquired Bunge's fertilizer nutrients assets in Brazil,
including its interest in Fertilizantes Fosfatados S.A. (Fosfertil)
on May 27, 2010 for cash proceeds of $3.9 billion. All assets
and liabilities that were subject to the Agreement were classified
as held for sale at March 31, 2010.
|
|
|
|
SOURCE Bunge Limited