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Investor
Contact:
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Mark
Haden
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Bunge
Limited
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914-684-3398
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Mark.Haden@Bunge.com
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Media
Contact:
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Stewart
Lindsay
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Bunge
Limited
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914-684-3369
Stewart.Lindsay@Bunge.com
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www.bunge.com
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Bunge
Reports Second Quarter Results
White Plains, NY – July 24, 2008 –
Bunge Limited (NYSE:BG)
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Total
segment EBIT reached $1,078 million
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·
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Agribusiness
results were strong across the
business
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·
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Fertilizer
benefited from the strong global agricultural
environment
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·
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The
Company is increasing its full year 2008 earnings guidance by $2.25 per
share
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(In millions,
except per share data and percentages)
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Quarter
Ended
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Six
Months Ended
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6/30/08
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6/30/07
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%
Change
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6/30/08
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6/30/07
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%
Change
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Volumes
(metric tons)
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36,318
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35,441
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2
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%
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67,281
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65,153
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3
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%
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Net
sales
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$
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14,365
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$
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8,298
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73
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%
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$
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26,834
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$
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15,641
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72
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%
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Total segment EBIT
(1,2)
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$
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1,078
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$
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250
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331
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%
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$
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1,520
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$
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302
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403
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%
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Agribusiness
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$
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614
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$
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143
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329
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%
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$
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865
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$
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130
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565
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%
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Fertilizer
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$
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393
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$
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71
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454
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%
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$
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526
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$
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107
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392
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%
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Edible
Oil Products
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$
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15
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$
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6
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150
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%
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$
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65
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$
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24
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171
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%
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Milling
products
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$
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56
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$
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30
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87
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%
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$
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64
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$
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41
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56
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%
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Net income
(2)
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$
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751
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$
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168
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347
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%
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$
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1,040
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$
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182
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471
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%
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Earnings
per common share-
diluted
(2,3)
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$
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5.45
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$
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1.30
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319
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%
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$
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7.56
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$
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1.35
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460
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%
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(1)
Total
segment earnings before interest and tax (“EBIT”) is a non-GAAP financial
measure. The information required by Regulation G under the
Securities Exchange Act of 1934, including a reconciliation to net income, is
included in the tables attached to this press release.
(2)
Bunge’s
results included certain gains and charges that may be of interest to investors.
See the Additional Financial Information section included in the tables attached
to this press release for more information.
(3)
See
Note 1 to the consolidated statements of income attached to this press release
for information on the calculation of diluted earnings per
share.
Alberto Weisser,
Bunge’s Chairman and Chief Executive Officer stated, “The second quarter was
characterized by good demand and strong margins. Bunge’s outstanding
performance is a reflection of our skilled team and the value of our global and
integrated network of operations.
“The quarter saw
the announcement of our agreement to combine with Corn Products. The
transaction, which we expect to close in the fourth quarter, will expand our
operations into the highly complementary corn wet milling value
chain. It will provide new opportunities for growth and a more
diverse revenue stream by broadening Bunge’s product portfolio and by providing
access to new geographic markets.
“Over the past
several years, crop production has not kept pace with overall demand, which is
driven primarily by the steady trends of global population growth and rising
living standards in developing economies. Current agricultural
commodity prices reflect this fact, as well as the higher cost of
energy. The world needs a greater supply of grains and oilseeds, and
in the near term crop prices should remain at levels that provide an incentive
to farmers to produce larger harvests. This should lead to strong
demand for fertilizer in regions with the greatest potential for agricultural
expansion, such as Brazil. At the same time, a high price, volatile
environment will require disciplined use of working capital and effective risk
management.
“Meeting the
long-term challenge of supplying a growing world with ample supplies of
affordable food will require not only greater crop production, but efficient
distribution and processing. As the world consumes greater volumes of
agricultural commodities and food products, the value of these services should
increase. Providing them is Bunge’s role, and we will continue to
invest to meet that responsibility effectively and profitably.
“The billions of
dollars we reinvest in our operations, whether in the form of working capital to
buy farmers’ crops or in new assets, such as port terminals, processing plants,
fertilizer mines and milling facilities, creates economic benefits for Bunge and
the food production chain in general.
“We recently
announced plans for significant new investments in the Brazilian fertilizer
industry. Along with Fosfertil, Bunge will invest approximately $2
billion in coming years to expand our local production of phosphate rock and
intermediate fertilizer products. This will increase Bunge’s internal
supply and reduce Brazil’s need to import fertilizer raw
materials.
Agribusiness
During the quarter,
oilseed processing, grain origination and distribution results benefited from
higher margins around the world. Risk management strategies worked
well during a volatile period.
Second quarter
results included a $117 million credit resulting from a favorable ruling
related to certain transactional taxes in Brazil.
Fertilizer
The excellent
performance in fertilizer was due to strong farmer demand and
margins. Retail volumes were higher in the quarter due to product
sales for soybean and corn plantings, which historically are purchased in the
second half of the year. Soybean and corn farmers accelerated
purchases because of favorable agricultural commodity prices and concerns about
increasing crop input costs. Fosfertil volumes were lower compared to
a strong period last year when it benefited from the retail industry restocking
inventories. Minority interest increased in the quarter due to higher
results at Fosfertil.
Edible
Oil Products
Excluding a $14
million land sale, results declined primarily due to high raw material costs in
Europe. Equity in earnings of affiliates decreased in the quarter due
to lower results at Saipol, our French packaged oil joint-venture.
Milling
Products
Stronger results
were largely due to improved margins in wheat milling.
Second quarter
results included an $11 million credit resulting from a favorable ruling related
to certain transactional taxes in Brazil.
Financial
Costs
Interest expense
increased due to higher average borrowings, mostly resulting from the higher
prices of agricultural commodity inventories which drove higher average working
capital levels.
Foreign exchange
gains, incurred primarily on the net U.S. dollar-denominated monetary liability
positions of Bunge’s Brazilian and Argentine subsidiaries, were $258 million in
the second quarter of 2008. These gains largely offset the negative
impact of foreign exchange on the valuation of inventories included in gross
profit.
Income
Taxes
The effective tax
rate for the six months ended June 30, 2008 was 28% compared to 25% for the same
period in 2007. The increase in the effective tax rate was primarily
due to increases in operating earnings in higher tax jurisdictions.
Cash
Flow
Cash used by
operations in the second quarter of 2008 was $130 million compared to cash used
by operations in the same period last year of $594 million. For the
six months ended June 30, 2008, cash used by operations was $483 million
compared to cash used by operations in the same period last year of $776
million. Improved year-over-year performance, despite the significant
rise in commodity prices, reflects higher earnings and actions taken to increase
the efficiency of working capital management.
Jacqualyn Fouse,
Chief Financial Officer, stated, “Looking to the second half of the year,
fertilizer fundamentals should remain strong. While growth in demand
for some agricultural products may soften slightly due to the sustained period
of high prices, agribusiness margins should be solid. Edible oils
should improve from its performance in this quarter. In consideration
of this outlook, we are increasing our 2008 full-year earnings guidance from
$9.35 to $9.65 per share to $11.60 to $11.90 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.”
Conference
Call and Webcast Details
Bunge Limited's
management will host a conference call at 10:00 a.m. EDT on Thursday, July 24,
2008, to discuss the company's results.
Additionally, a
slide presentation to accompany the discussion of the second quarter financial
results can be found in the ‘Investor Information’ section of our Web site,
www.Bunge.com
,
under ‘Investor Presentations’.
To
listen to the conference call, please dial (877) 857-6177. If you are
located outside of the United States or Canada, dial (719)
325-4769. Please dial in five to 10 minutes before the scheduled
start time. When prompted, enter confirmation code 3152490. The
conference call will also be available live on the company's Web site at
www.Bunge.com
.
To
access the webcast, click the “News and Information” link on the Bunge homepage
then select "Webcasts and Upcoming Events". Click on the link for the
"Q2 2008 Bunge Limited Conference Call," and follow the prompts to join the
call. Please go to the Web site at least 15 minutes prior to the call to
register and to download and install any necessary audio software.
For those who
cannot listen to the live broadcast, a replay of the call will be available
following the call and continuing through August 23, 2008. To listen
to the replay, please dial (888) 203-1112, or, if located outside of the United
States or Canada, dial (719) 457-0820. When prompted, enter
confirmation code 3152490. A rebroadcast of the conference call will
also be available on the company's Web site. To locate the
rebroadcast on the Web site, click on the “News and Information” link on the
Bunge homepage then select "Audio Archives" from the left-hand
menu. Select the link for the "Q2 2008 Bunge Limited Conference
Call". Follow the prompts to access the replay.
About
Bunge Limited
Bunge Limited
(
www.Bunge.com
,
NYSE: BG) is a leading global agribusiness and food company founded in 1818 and
headquartered in White Plains, New York. Bunge’s over 25,000
employees in over 30 countries enhance lives by improving the global
agribusiness and food production chain. The company supplies
fertilizer to farmers in South America, originates, transports and processes
oilseeds, grains and other agricultural commodities worldwide, produces food
products for commercial customers and consumers and supplies raw materials and
services to the biofuels industry.
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," "expect," "anticipate,"
"believe," "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, as well as those of the markets we
serve or intend to serve, 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: our
ability to complete, integrate and benefit from acquisitions, divestitures,
joint ventures and strategic alliances; estimated demand for the commodities and
other products that we sell and use in our business; industry conditions,
including the cyclicality of the agribusiness industry and unpredictability of
the weather; agricultural, economic and political conditions in the primary
markets where we operate; and other economic, business, competitive and/or
regulatory 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
Information
On
June 21, 2008, Bunge and Corn Products International, Inc. (Corn Products)
entered into a merger agreement pursuant to which Bunge will acquire Corn
Products. This press release is not a substitute for the joint proxy
statement/prospectus and any other documents Bunge Limited and Corn Products
International, Inc. intend to file with the
SEC in connection
with the proposed merger. Investors and securityholders are urged to carefully
read the joint proxy statement/prospectus regarding the proposed merger when it
becomes available, because it will contain important information. The joint
proxy statement/prospectus will be, and other documents filed or to be filed by
Bunge and Corn Products with the SEC are or will be, available free of charge at
the SEC’s web site (www.sec.gov), by accessing Bunge’s website at www.bunge.com
under the tab “About Bunge” and then under the heading “Investor Information”
and from Bunge by directing a request to Bunge Limited, 50 Main Street, White
Plains, NY 10606, Attention: Investor Relations, and by accessing Corn Products’
website at www.cornproducts.com under the tab “Investors” and then under the
heading “Financial Reports” and then under the heading “SEC Filings” and from
Corn Products by directing a request to Corn Products International, Inc., 5
Westbrook Corporate Center Westchester, IL 60154, Attention: Investor
Relations.
Neither Bunge nor
Corn Products is currently engaged in a solicitation of proxies from the
securityholders of Bunge or Corn Products in connection with the proposed
merger. If a proxy solicitation commences, Bunge, Corn Products and their
respective directors, executive officers and other employees may be deemed to be
participants in such solicitation. Information about Bunge’s directors and
executive officers is available in Bunge’s proxy statement, dated April 16,
2008, for its 2008 annual meeting of shareholders and in Bunge’s most recent
filing on Form 10-K. Information about Corn Products’ directors and executive
officers is available in Corn Products’ proxy statement, dated April 4, 2008,
for its 2008 annual meeting of stockholders and in Corn Products’ most recent
filing on Form 10-K. Additional information about the interests of potential
participants will be included in the joint proxy statement/prospectus when it
becomes available.