Bunge Limited (NYSE:BG) today reported second quarter 2022
results
- Q2 GAAP EPS of $1.34 vs. $2.37 in the prior year; $2.97 vs.
$2.61 on an adjusted basis excluding certain gains/charges and
mark-to-market timing differences
- In Agribusiness higher Processing results were more than
offset by lower results in Merchandising versus a particularly
strong prior year
- Refined and Specialty Oils performance improved in all
regions with particular strength in North America and
Europe
- Increasing full-year adjusted EPS outlook to at least $12
per share
- Introducing earnings framework of ~$11 per share by end of
2026 building on increased earnings baseline of $8.50, plus future
investments and share repurchases
Greg Heckman, Bunge’s Chief Executive Officer, commented, “In
the face of significant market shifts, our team successfully
delivered another quarter of year-over-year earnings improvement in
our core segments. Our results reflect the adaptability of our
business and strength of our operating model.
“Our focus on continuous improvement across everything we do
allows us to be agile and to consistently create value in a variety
of market environments. We are confident in our ability to
successfully navigate volatility and effectively deploy capital,
while continuing to help our customers on both ends of the value
chains find solutions to the opportunities and challenges they
face.”
Three Months Ended
June 30,
Six Months Ended
June 30,
(US$ in millions, except per share
data)
2022
2021
2022
2021
Net income attributable to
Bunge
$
206
$
362
$
894
$
1,194
Net income per common
share-diluted
$
1.34
$
2.37
$
5.81
$
7.85
Mark-to-market timing difference (a)
$
1.26
$
0.24
$
0.87
$
(1.05
)
Certain (gains) and charges (b)
$
0.37
$
—
$
0.55
$
(1.08
)
Adjusted Net income per common
share-diluted (c)
$
2.97
$
2.61
$
7.23
$
5.72
Core Segment EBIT (c) (d)
$
408
$
500
$
1,330
$
1,652
Mark-to-market timing difference (a)
233
50
157
(195
)
Certain (gains) & charges (b)
68
—
80
(170
)
Adjusted Core Segment EBIT (c)
$
709
$
550
$
1,567
$
1,287
Corporate and Other EBIT (c)
$
(92
)
$
(60
)
$
(155
)
$
(146
)
Certain (gains) & charges (b)
—
—
(29
)
—
Adjusted Corporate and Other EBIT
(c)
$
(92
)
$
(60
)
$
(184
)
$
(146
)
Non-core Segment EBIT (c) (e)
$
6
$
19
$
40
$
39
Certain (gains) & charges (b)
—
—
—
—
Adjusted Non-core Segment EBIT
(c)
$
6
$
19
$
40
$
39
Total Segment EBIT (c)
$
322
$
459
$
1,215
$
1,545
Mark-to-market timing difference (a)
233
50
157
(195
)
Total Certain (gains) & charges
(b)
68
—
51
(170
)
Adjusted Total Segment EBIT (c)
$
623
$
509
$
1,423
$
1,180
(a)
Mark-to-market timing impact of certain
commodity and freight contracts, readily marketable inventories,
and related hedges associated with committed future operating
capacity. See note 3 in the Additional Financial information
section of this release for details.
(b)
Certain (gains) & charges included in
Total Segment EBIT. See Additional Financial Information for
details.
(c)
Core Segment EBIT, Adjusted Core Segment
EBIT, Corporate and Other EBIT, Adjusted Corporate and Other EBIT,
Non-core Segment EBIT, Adjusted Non-core Segment EBIT, Total
Segment EBIT, Adjusted Total Segment EBIT, and Adjusted Net income
per common share-diluted are non-GAAP financial measures.
Reconciliations to the most directly comparable U.S. GAAP measures
are included in the tables attached to this press release and the
accompanying slide presentation posted on Bunge's website.
(d)
Core Segment earnings before interest and
tax ("Core Segment EBIT") comprises the aggregate earnings before
interest and tax (“EBIT”) of Bunge’s Agribusiness, Refined and
Specialty Oils and Milling reportable segments, and excludes
Bunge's Sugar & Bioenergy reportable segment and Corporate and
Other activities.
(e)
Non-core Segment EBIT comprises Bunge’s
Sugar & Bioenergy reportable segment EBIT, which reflects
Bunge's share of the results of its 50/50 joint venture with BP
p.l.c.
Core Segments
Agribusiness
Three Months Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Volumes (in thousand metric
tons)
19,490
21,649
39,560
43,293
Net Sales
$
12,747
$
11,654
$
23,978
$
21,444
Gross Profit
$
316
$
410
$
1,180
$
1,295
Selling, general and administrative
expense
$
(119
)
$
(114
)
$
(240
)
$
(194
)
Foreign exchange gains (losses)
$
(93
)
$
36
$
(84
)
$
29
EBIT attributable to noncontrolling
interests
$
(13
)
$
(3
)
$
(17
)
$
(11
)
Other income (expense) - net
$
(14
)
$
24
$
(77
)
$
46
Income (loss) from affiliates
$
16
$
11
$
30
$
35
Segment EBIT
$
93
$
364
$
792
$
1,200
Mark-to-market timing difference
224
39
141
(196
)
Certain (gains) & charges
69
—
80
—
Adjusted Segment EBIT
$
386
$
403
$
1,013
$
1,004
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
59
$
—
$
68
$
—
Certain (gains) & charges, Earnings
per share
$
0.38
$
—
$
0.44
$
—
Processing (2)
Three Months Ended
Six Months Ended
(US$ in millions)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Processing EBIT
$
11
$
338
$
562
$
1,067
Mark-to-market timing difference
175
(129
)
77
(495
)
Certain (gains) & charges
44
—
52
—
Adjusted Processing EBIT
$
230
$
209
$
691
$
572
Higher results in the quarter were primarily driven by U.S. and
Brazil soy crush due to strong meal and oil demand. Results in
softseed crush were also higher than last year primarily driven by
North America.
Merchandising (2)
Three Months Ended
Six Months Ended
(US$ in millions)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Merchandising EBIT
$
82
$
26
$
230
$
133
Mark-to-market timing difference
49
168
64
299
Certain (gains) & charges
25
—
28
—
Adjusted Merchandising EBIT
$
156
$
194
$
322
$
432
Merchandising had a good quarter, however, results were down
compared to a particularly strong prior year, as a higher
contribution from global grains was more than offset by lower
results in ocean freight.
Refined & Specialty Oils
Three Months Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Volumes (in thousand metric
tons)
2,328
2,242
4,624
4,419
Net Sales
$
4,445
$
3,198
$
8,421
$
5,924
Gross Profit
$
325
$
195
$
587
$
430
Selling, general and administrative
expense
$
(87
)
$
(90
)
$
(176
)
$
(176
)
Foreign exchange gains (losses)
$
(8
)
$
1
$
(8
)
$
2
EBIT attributable to noncontrolling
interests
$
(7
)
$
(5
)
$
(4
)
$
(83
)
Other income (expense) - net
$
(5
)
$
1
$
(8
)
$
237
Segment EBIT
$
218
$
102
$
391
$
410
Mark-to-market timing difference
(3
)
11
3
(3
)
Certain (gains) & charges
(1
)
—
—
(170
)
Adjusted Segment EBIT
$
214
$
113
$
394
$
237
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
(1
)
$
—
$
—
$
(165
)
Certain (gains) & charges, Earnings
per share
$
(0.01
)
$
—
$
—
$
(1.08
)
Refined & Specialty Oils Summary
Results were higher in all regions led by strength in North
America and Europe refining, both benefiting from strong food
demand, as well as strong fuel demand in the U.S.
Milling
Three Months Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Volumes (in thousand metric
tons)
1,143
1,120
2,304
2,161
Net Sales
$
677
$
471
$
1,280
$
862
Gross Profit
$
126
$
57
$
197
$
91
Selling, general and administrative
expense
$
(28
)
$
(25
)
$
(52
)
$
(48
)
Foreign exchange gains (losses)
$
—
$
2
$
3
$
—
Segment EBIT
$
97
$
34
$
147
$
42
Mark-to-market timing difference
12
—
13
4
Certain (gains) & charges
—
—
—
—
Adjusted Segment EBIT
$
109
$
34
$
160
$
46
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
—
$
—
$
—
$
—
Certain (gains) & charges, Earnings
per share
$
—
$
—
$
—
$
—
Milling Summary
Higher results in the quarter were driven by improved margins in
North and South America wheat milling. Results also reflected
effective risk management of our supply chains.
Corporate and Other
Three Months Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Gross Profit
$
3
$
2
$
8
$
(6
)
Selling, general and administrative
expense
$
(100
)
$
(68
)
$
(174
)
$
(150
)
Foreign exchange gains (losses)
$
(9
)
$
(4
)
$
(9
)
$
(6
)
EBIT attributable to noncontrolling
interests
$
1
$
—
$
(11
)
$
—
Other income (expense) - net
$
13
$
10
$
32
$
15
Segment EBIT
$
(92
)
$
(60
)
$
(155
)
$
(146
)
Certain (gains) & charges
—
—
(29
)
—
Adjusted Segment EBIT
$
(92
)
$
(60
)
$
(184
)
$
(146
)
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
—
$
—
$
18
$
—
Certain (gains) & charges, Earnings
per share
$
—
$
—
$
0.11
$
—
Corporate
Three Months Ended
Six Months Ended
(US$ in millions)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Corporate EBIT
$
(112
)
$
(71
)
$
(158
)
$
(157
)
Certain (gains) & charges
—
—
(29
)
—
Adjusted Corporate EBIT
$
(112
)
$
(71
)
$
(187
)
$
(157
)
Other
Three Months Ended
Six Months Ended
(US$ in millions)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Other EBIT
$
20
$
11
$
3
$
11
Certain (gains) & charges
—
—
—
—
Adjusted Other EBIT
$
20
$
11
$
3
$
11
Corporate and Other Summary
The increase in Corporate expenses in the quarter was primarily
related to investments in growth initiatives and timing of
performance-based compensation accruals. The increase in Other was
primarily related to our captive insurance program and gains on
investments in Bunge Ventures.
Non-core Segments
Sugar & Bioenergy
Three Months Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2022
Jun 30, 2021
Jun 30, 2022
Jun 30, 2021
Net Sales
$
57
$
68
$
121
$
122
Gross Profit
$
2
$
1
$
4
$
2
Income (loss) from affiliates
$
4
$
18
$
36
$
37
Segment EBIT
$
6
$
19
$
40
$
39
Certain (gains) & charges
—
—
—
—
Adjusted Segment EBIT
$
6
$
19
$
40
$
39
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
—
$
—
$
—
$
—
Certain (gains) & charges, Earnings
per share
$
—
$
—
$
—
$
—
Sugar & Bioenergy Summary
Higher ethanol and sugar prices were more than offset by the
combination of lower ethanol volumes and increased costs.
Cash Flow
Six Months Ended
Jun 30, 2022
Jun 30, 2021
Cash used for operating activities
$
(4,457
)
$
(1,436
)
Net proceeds from beneficial interest in
securitized trade receivables
3,311
1,872
Cash provided by (used for) operating
activities, adjusted
$
(1,146
)
$
436
Cash used for operations in the six months ended June 30, 2022
was $4,457 million compared to cash used of $1,436 million in the
same period in the prior year. Adjusting for the net proceeds from
beneficial interest in securitized trade receivables, cash used for
operating activities was $1,146 million compared with cash provided
by operating activities of $436 million in the prior year. Cash
used for operating activities was driven by an increase in working
capital primarily as a result of higher commodity prices. Funds
from operations (FFO) adjusted for notable items and mark-to-market
timing differences was $1,239 million compared to $900 million in
the prior year.(4)
Income Taxes
For the six months ended June 30, 2022, income tax expense was
$144 million compared to $242 million in the prior year. The
decrease was primarily due to lower pre-tax income.
Bunge continues to closely monitor developments related to the
pandemic to ensure the health and safety of its employees. While
most facilities have been able to return at or near normal
operations, the Company’s internal task force is prepared to
re-establish safety measures and protocols should infection rates
increase.
Bunge continues to monitor local, regional and national
governmental actions that could limit or restrict the movement of
agricultural commodities or products or otherwise disrupt physical
product flows or its ability to operate in the future.
We are increasing our full-year 2022 EPS outlook to reflect
second quarter results and the current market environment. We are
now forecasting full-year 2022 adjusted EPS of at least $12 per
share, with potential upside depending on the market environment
and supply and demand balance.
In Agribusiness, full-year results are expected to be slightly
higher than our previous outlook, but remain down from last year
due to lower expected performance in Merchandising, which had a
particularly strong 2021.
In Refined and Specialty Oils, full-year results are expected to
be up from our previous outlook and higher than last year, driven
by strong demand in our North American and European businesses.
In Milling, full-year results are expected to be up from our
previous outlook and significantly higher than prior year, driven
by our strong first half of the year results.
In Corporate and Other, results are now expected to be less
favorable than our previous outlook and more in line with the prior
year.
In Non-Core, full-year results in the sugar and bioenergy joint
venture are expected to be in line with prior year.
Additionally, the Company now expects the following for 2022: an
adjusted annual effective tax rate in the range of 14% to 16%; net
interest expense in the range of $310 to $330 million; capital
expenditures in the lower end of the range of $650 to $750 million;
and depreciation and amortization of approximately $400
million.
- Introducing Earnings Growth Framework
The Company has also introduced an earnings framework of
approximately $11 per share by the end of 2026, which builds on its
increased mid-cycle earnings baseline of $8.50 per share, plus
approximately $3.3 billion of projected future investments in
growth capex and M&A, and approximately $1.25 billion of share
repurchases through the period. Additional information on the
earnings framework is provided in the Q2 2022 slide presentation
and will be discussed on the Company’s earnings conference call and
webcast, as detailed below.
- Conference Call and Webcast Details
Bunge Limited’s management will host a conference call at
8:00a.m. Eastern (7:00a.m. Central) on Wednesday, July 27, 2022 to
discuss the company’s results.
Additionally, a slide presentation to accompany the discussion
of results will be posted on www.bunge.com.
To listen to the call, please dial 1 (844) 735-3666. If you are
located outside the United States or Canada, dial +1 (412)
317-5706. Please dial in five to 10 minutes before the scheduled
start time.
The call will also be webcast live at www.bunge.com. To access
the webcast, go to “Events and presentations” in the “Investors”
section of the company’s website. Select “Q2 2022 Bunge Limited
Earnings Conference Call” and follow the prompts. Please go to the
website at least 15 minutes prior to the call to register and
download any necessary audio software.
A replay of the call will be available later in the day on July
27, 2022, continuing through August 7, 2022. To listen to it,
please dial 1 (877) 344-7529 in the United States, 1 (855) 669-9658
in Canada, or +1 (412) 317-0088 in other locations. When prompted,
enter confirmation code 1101612. A replay will also be available in
"Past events" at "Events and presentations" in the "Investors"
section of the company's website.
At Bunge (NYSE: BG), our purpose is to connect farmers to
consumers to deliver essential food, feed and fuel to the world.
With more than two centuries of experience, unmatched global scale
and deeply rooted relationships, we work to put quality food on the
table, increase sustainability where we operate, strengthen global
food security, and help communities prosper. As the world’s leader
in oilseed processing and a leading producer and supplier of
specialty plant-based oils and fats, we value our partnerships with
farmers to improve the productivity and environmental efficiency of
agriculture across our value chains and to bring quality products
from where they’re grown to where they’re consumed. At the same
time, we collaborate with our customers to create and reimagine the
future of food, developing tailored and innovative solutions to
meet evolving dietary needs and trends in every part of the world.
Our Company is headquartered in St. Louis, Missouri, and we have
more than 22,000 dedicated employees working across approximately
300 facilities located in more than 40 countries.
We routinely post important information for investors on our
website, www.bunge.com, in the "Investors" section. We may use this
website as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD. Accordingly, investors should monitor the Investors section of
our website, in addition to following our press releases, SEC
filings, public conference calls, presentations and webcasts. The
information contained on, or that may be accessed through, our
website is not incorporated by reference into, and is not a part
of, this document.
- 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 (Exchange Act). 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 cause actual results to differ from these forward-looking
statements: the impact on our operations and facilities from the
military conflict in Ukraine and the resulting economic and other
sanctions imposed on Russia, including the impact on Bunge
resulting from a continuation and/or escalation of the conflict and
sanctions against Russia; 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; competitive
developments in our industries; the effects of weather conditions
and the outbreak of crop and animal disease on our business; global
and regional economic, agricultural, financial and commodities
market, political, social and health conditions; the impacts of
pandemic outbreaks, including COVID-19; the outcome of pending
regulatory and legal proceedings; our ability to complete,
integrate and benefit from acquisitions, dispositions, joint
ventures and strategic alliances; the impact of government policies
and regulations; changes in government policies, laws and
regulations affecting our business, including agricultural and
trade policies and environmental, tax and biofuels regulation; the
impact of seasonality; our capital allocation plans, funding needs
and financing sources; changes in foreign exchange policy or rates;
the effectiveness of our risk management strategies; our ability to
attract and retain executive management and key personnel; the
impact of our dependence on third parties; operational risks,
including industrial accidents, natural disasters and cybersecurity
incidents; 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
Certain gains and (charges), quarter-to-date
The following table provides a summary of certain gains and
(charges) that may be of interest to investors, including a
description of these items and their effect on Net income (loss)
attributable to Bunge, Earnings per share diluted and Segment EBIT
for the three month periods ended June 30, 2022 and 2021.
(US$ in millions, except per share
data)
Net Income (Loss)
Attributable to
Bunge
Earnings
Per Share
Diluted
Segment
EBIT
Three Months Ended June 30,
2022
2021
2022
2021
2022
2021
Core Segments:
$
(58
)
$
—
$
(0.37
)
$
—
$
(68
)
$
—
Agribusiness
$
(59
)
$
—
$
(0.38
)
$
—
$
(69
)
$
—
Ukraine-Russia Conflict
(59
)
—
(0.38
)
—
(69
)
—
Refined and Specialty Oil
Products
$
1
$
—
$
0.01
$
—
$
1
$
—
Ukraine-Russia Conflict
1
—
0.01
—
1
—
Milling Products
$
—
$
—
$
—
$
—
$
—
$
—
Corporate and Other:
$
—
$
—
$
—
$
—
$
—
$
—
Non-core Segment:
$
—
$
—
$
—
$
—
$
—
$
—
Sugar & Bioenergy
$
—
$
—
$
—
$
—
$
—
$
—
Total
$
(58
)
$
—
$
(0.37
)
$
—
$
(68
)
$
—
See Definition and Reconciliation of
Non-GAAP Measures.
Core Segments
Agribusiness
EBIT for the three months ended June 30, 2022 included $69
million of charges, recorded in Cost of goods sold, resulting from
the Ukraine-Russia conflict, primarily related to losses associated
with inventories physically located in occupied territories in
Ukraine, or in difficult to access locations with high costs of
recovery.
Refined and Specialty Oils
EBIT for the three months ended June 30, 2022 included a
reversal of $1 million of bad debt provisions, recorded in
SG&A, previously recorded in conjunction with the
Ukraine-Russia conflict but for which the underlying receivables
were subsequently recovered.
Certain gains and (charges), year-to-date
The following table provides a summary of certain gains and
(charges) that may be of interest to investors, including a
description of these items and their effect on Net income (loss)
attributable to Bunge, Earnings per share diluted and Segment EBIT
for the six month periods ended June 30, 2022 and 2021.
(US$ in millions, except per share
data)
Net Income (Loss)
Attributable to
Bunge
Earnings
Per Share
Diluted
Segment
EBIT
Six months ended June 30,
2022
2021
2022
2021
2022
2021
Core Segments:
$
(68
)
$
165
$
(0.44
)
$
1.08
$
(80
)
$
170
Agribusiness
$
(68
)
$
—
$
(0.44
)
$
—
$
(80
)
$
—
Ukraine-Russia Conflict
(68
)
—
(0.44
)
—
(80
)
—
Refined and Specialty Oil
Products
$
—
$
165
$
—
$
1.08
$
—
$
170
Ukraine-Russia Conflict
—
—
—
—
—
—
Gain on sales of assets
—
165
—
1.08
—
170
Milling Products
$
—
$
—
$
—
$
—
$
—
$
—
Corporate and Other:
$
(18
)
$
—
$
(0.11
)
$
—
$
29
$
—
Pension settlement
21
—
0.14
—
29
—
Bond early redemption
(39
)
—
(0.25
)
—
—
—
Non-core Segment:
$
—
$
—
$
—
$
—
$
—
$
—
Sugar & Bioenergy
$
—
$
—
$
—
$
—
$
—
$
—
Total
$
(86
)
$
165
$
(0.55
)
$
1.08
$
(51
)
$
170
See Definition and Reconciliation of
Non-GAAP Measures.
Core Segments
Agribusiness
EBIT for the six months ended June 30, 2022 included $80 million
of charges, recorded in Cost of goods sold, resulting from the
Ukraine-Russia conflict, primarily related primarily related to
losses associated with inventories physically located in occupied
territories in Ukraine, or in difficult to access locations with
high costs of recovery.
Refined and Specialty Oils
EBIT for the six months ended June 30, 2021 included $170
million in gains on sales of assets, comprised of a $151 million
gain on sale of our Rotterdam Oils Refinery, at Bunge's 70% share,
and a $19 million gain on sale of an oils packaging facility in
Mexico, both recorded in Other income (expense) - net.
Corporate and Other
EBIT for the six months ended June 30, 2022 included a $29
million gain, at Bunge's 70% share, related to the settlement of
one of the Company’s international defined benefit pension plans,
recorded in Other income (expense) - net.
Net income for the six months ended June 30, 2022 also included
$39 million of expense (net of $8 million in tax benefits) related
to the early redemption of the Company's 4.350% unsecured senior
notes due March 15, 2024. In connection with the early redemption,
the Company recorded a $47 million pre-tax charge within Interest
expense, comprising a $31 million "make-whole" payment and a $16
million loss on the termination and de-designation of related
interest rate hedges.
- Consolidated Earnings Data (Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(US$ in millions, except per share
data)
2022
2021
2022
2021
Net sales
$
17,933
$
15,391
$
33,813
$
28,352
Cost of goods sold
(17,161
)
(14,726
)
(31,837
)
(26,540
)
Gross profit
772
665
1,976
1,812
Selling, general and administrative
expenses
(334
)
(297
)
(642
)
(568
)
Foreign exchange (losses) gains
(110
)
35
(98
)
25
Other income (expense) – net
(6
)
35
(53
)
298
Income (loss) from affiliates
20
29
65
73
EBIT attributable to noncontrolling
interest (a) (1)
(20
)
(8
)
(33
)
(95
)
Total Segment EBIT
322
459
1,215
1,545
Interest income
11
6
20
15
Interest expense
(92
)
(54
)
(203
)
(127
)
Income tax (expense) benefit
(36
)
(50
)
(144
)
(242
)
Noncontrolling interest share of interest
and tax (a) (1)
1
1
6
3
Net income (loss) attributable to Bunge
(1)
206
362
894
1,194
Convertible preference share dividends
—
(9
)
—
(17
)
Net income (loss) available to Bunge
common shareholders
$
206
$
353
$
894
$
1,177
Add back convertible preference share
dividends
—
9
—
17
Net income (loss) available to Bunge
common shareholders - diluted
$
206
$
362
$
894
$
1,194
Net income (loss) per common share
diluted attributable to Bunge common shareholders
$
1.34
$
2.37
$
5.81
$
7.85
Weighted–average common shares
outstanding - diluted
154
153
154
152
(a) The line items "EBIT attributable to
noncontrolling interest" and "Noncontrolling interest share of
interest and tax" when combined, represent consolidated Net
(income) loss attributable to noncontrolling interests and
redeemable noncontrolling interests on a U.S. GAAP basis of
presentation.
- Condensed Consolidated Balance Sheets (Unaudited)
June 30,
December 31,
(US$ in millions)
2022
2021
Assets
Cash and cash equivalents
$
818
$
902
Trade accounts receivable, net
2,427
2,112
Inventories (a)
10,481
8,431
Assets held for sale
317
264
Other current assets
5,689
4,751
Total current assets
19,732
16,460
Property, plant and equipment, net
3,463
3,499
Operating lease assets
1,038
912
Goodwill and other intangible assets,
net
851
915
Investments in affiliates
986
764
Other non-current assets
1,349
1,269
Total assets
$
27,419
$
23,819
Liabilities and Equity
Short-term debt
$
2,154
$
673
Current portion of long-term debt
1,303
504
Trade accounts payable
5,347
4,250
Current operating lease obligations
396
350
Liabilities held for sale
61
122
Other current liabilities
3,840
3,425
Total current liabilities
13,101
9,324
Long-term debt
3,062
4,787
Non-current operating lease
obligations
585
506
Other non-current liabilities
1,131
996
Total liabilities
17,879
15,613
Redeemable noncontrolling
interest
351
381
Total equity
9,189
7,825
Total liabilities, redeemable
noncontrolling interest and equity
$
27,419
$
23,819
(a) Includes readily marketable
inventories of $8,378 million and $6,869 million at June 30, 2022
and December 31, 2021, respectively. Of these amounts, $6,616
million and $4,857 million, respectively, can be attributable to
merchandising activities.
- Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(US$ in millions)
2022
2021
Operating Activities
Net income (loss) (1)
$
921
$
1,286
Adjustments to reconcile net income (loss)
to cash provided by (used for) operating activities:
Foreign exchange (gain) loss on net
debt
(6
)
(133
)
Depreciation, depletion and
amortization
204
212
Deferred income tax expense (benefit)
(59
)
(83
)
(Gain) loss on sale of investments and
property, plant and equipment
—
(240
)
Other, net
68
(24
)
Changes in operating assets and
liabilities, excluding the effects of acquisitions:
Trade accounts receivable
(341
)
(784
)
Inventories
(2,341
)
(1,003
)
Secured advances to suppliers
46
25
Trade accounts payable and accrued
liabilities
943
737
Advances on sales
(54
)
(150
)
Net unrealized (gain) loss on derivative
contracts
(159
)
639
Margin deposits
(86
)
391
Marketable securities
285
(5
)
Beneficial interest in securitized trade
receivables
(3,443
)
(2,121
)
Other, net
(435
)
(183
)
Cash provided by (used for) operating
activities
(4,457
)
(1,436
)
Investing Activities
Payments made for capital expenditures
(212
)
(133
)
Proceeds from investments
87
26
Payments for investments
(117
)
(153
)
Settlement of net investment hedges
(143
)
(25
)
Proceeds from beneficial interest in
securitized trade receivables
3,311
2,049
Payments for beneficial interest in
securitized trade receivables
—
(177
)
Proceeds from the sale of investments and
property, plant and equipment
1
345
Payments for investments in affiliates
(54
)
(42
)
Other, net
(6
)
(1
)
Cash provided by (used for) investing
activities
2,867
1,889
Financing Activities
Net borrowings (repayments) of short-term
debt
1,576
(968
)
Net proceeds (repayments) of long-term
debt
(578
)
998
Proceeds from the exercise of options for
common shares
44
72
Dividends paid to common and preference
shareholders
(162
)
(158
)
Sale of noncontrolling interest
521
—
Acquisition of noncontrolling interest
—
(147
)
Other, net
44
(27
)
Cash provided by (used for) financing
activities
1,445
(230
)
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
63
(100
)
Net increase (decrease) in cash and
cash equivalents and restricted cash
(82
)
123
Cash and cash equivalents and
restricted cash - beginning of period
905
381
Cash and cash equivalents and
restricted cash - end of period
$
823
$
504
- Definition and 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 and Adjusted Total Segment EBIT
Bunge uses segment earnings before interest and tax (“Segment
EBIT”) to evaluate the operating performance of its individual
segments. Segment EBIT excludes EBIT attributable to noncontrolling
interests. Bunge also uses Core Segment EBIT, Non-Core Segment EBIT
and Total Segment EBIT to evaluate the operating performance of
Bunge’s Core reportable segments, Non-Core reportable segments, and
Total reportable segments together with its corporate and other
activities, respectively. Core Segment EBIT is the aggregate of the
earnings before interest and taxes of each of Bunge’s Agribusiness,
Refined and Specialty Oils, and Milling segments. Non-Core Segment
EBIT is the earnings before interest and taxes of Bunge’s Sugar
& Bioenergy segment. Total Segment EBIT is the aggregate of the
earnings before interest and taxes of Bunge’s Core and Non-Core
reportable segments, together with its corporate and other
activities.
Adjusted Core Segment EBIT, Adjusted Non-Core Segment EBIT, and
Adjusted Total Segment EBIT, are calculated by excluding temporary
mark-to-market timing differences, as defined in note 3 below, and
certain gains and (charges), as described in "Additional Financial
Information" above, from Core Segment EBIT, Non-Core Segment EBIT,
and Total Segment EBIT, respectively.
Core Segment EBIT, Non-Core Segment EBIT, Total Segment EBIT,
Adjusted Core Segment EBIT, Adjusted Non-Core Segment EBIT, and
Adjusted Total Segment EBIT are non-GAAP financial measures and are
not intended to replace Net income (loss) attributable to Bunge,
the most directly comparable U.S. GAAP financial measure. Bunge's
management believes these non-GAAP measures are a useful measure of
its reportable segments' operating profitability, since the
measures allow for an evaluation of segment performance without
regard to their financing methods or capital structure. For this
reason, operating performance measures such as these non-GAAP
measures are widely used by analysts and investors in Bunge's
industries. These non-GAAP measures are not a measure of
consolidated operating results under U.S. GAAP and should not be
considered as an alternative to net income (loss) or any other
measure of consolidated operating results under U.S. GAAP.
Net Income (loss) attributable to Bunge to Adjusted Net
Income (loss) available for common shareholders
Adjusted Net Income (loss) excludes temporary mark-to-market
timing differences, as defined in note 3 below, and certain gains
and (charges), as described in "Additional Financial Information"
above, and is a non-GAAP financial measure. This measure is not a
measure of Net income (loss) attributable to Bunge, the most
directly comparable U.S. GAAP financial measure. It should not be
considered as an alternative to Net Income (loss) attributable to
Bunge, Net Income (loss), or any other measure of consolidated
operating results under U.S. GAAP. Adjusted Net income (loss) is a
useful measure of the Company's profitability.
We also have presented projected adjusted net income per common
share for 2022 in the Outlook section of this earnings press
release, above. This information is provided only on a non-GAAP
basis without reconciliation to projected net income per common
share for 2022, the mostly directly comparable GAAP measure, due to
the inability at this time to quantify certain amounts necessary
for such reconciliation, including but not limited to future market
price movements over the remainder of the year.
Below is a reconciliation of Net income attributable to Bunge,
to Total Segment EBIT, and Adjusted Total Segment EBIT:
Three Months Ended
June 30,
Six Months Ended
June 30,
(US$ in millions)
2022
2021
2022
2021
Net income (loss) attributable to
Bunge
$
206
$
362
$
894
$
1,194
Interest income
(11
)
(6
)
(20
)
(15
)
Interest expense
92
54
203
127
Income tax expense (benefit)
36
50
144
242
Noncontrolling interest share of interest
and tax
(1
)
(1
)
(6
)
(3
)
Total Segment EBIT
$
322
$
459
$
1,215
$
1,545
Agribusiness EBIT
$
93
$
364
$
792
$
1,200
Refined and Specialty Oils EBIT
218
102
391
$
410
Milling EBIT
97
34
147
$
42
Core Segment EBIT
$
408
$
500
$
1,330
$
1,652
Corporate and Other EBIT
$
(92
)
$
(60
)
$
(155
)
$
(146
)
Sugar & Bioenergy EBIT
$
6
$
19
$
40
$
39
Non-Core Segment EBIT
$
6
$
19
$
40
$
39
Total Segment EBIT
$
322
$
459
$
1,215
$
1,545
Mark-to-market timing difference
233
50
157
(195
)
Certain (gains) & charges
68
—
51
(170
)
Adjusted Total Segment EBIT
$
623
$
509
$
1,423
$
1,180
Below is a reconciliation of Net income attributable to Bunge,
to Adjusted Net income (loss) available for common
shareholders:
Three Months Ended
June 30,
Six Months Ended
June 30,
(US$ in millions, except per share
data)
2022
2021
2022
2021
Net income (loss) attributable to
Bunge
$
206
$
362
$
894
$
1,194
Mark-to-market timing difference
194
36
132
(159
)
Certain (gains) and charges:
Ukraine-Russia conflict
58
—
68
—
Pension settlement
—
—
(21
)
—
Bond early redemption
—
—
39
—
Gain on sales of assets
—
—
—
(165
)
Adjusted Net income (loss) available
for common shareholders
$
458
$
398
$
1,112
$
870
Weighted-average common shares outstanding
- diluted, adjusted (a)
154
153
154
152
Adjusted Net income (loss) per common
share - diluted
$
2.97
$
2.61
$
7.23
$
5.72
(a) There were no anti-dilutive
outstanding stock options and contingently issuable restricted
stock units excluded from the weighted-average number of common
shares outstanding for the three month periods ended June 30, 2022
or 2021. There were zero and 2 million anti-dilutive outstanding
stock options and contingently issuable restricted stock units
excluded from the weighted-average number of common shares
outstanding for the six months ended June 30, 2022 and 2021,
respectively.
(1)
A reconciliation of Net income (loss)
attributable to Bunge, to Net income (loss) is as follows:
Six months ended June
30,
(US$ in millions)
2022
2021
Net income (loss) attributable to
Bunge
$
894
$
1,194
EBIT attributable to noncontrolling
interest
33
95
Noncontrolling interest share of interest
and tax
(6
)
(3
)
Net income (loss)
$
921
$
1,286
(2)
The Processing business included in our
Agribusiness segment consists of: global oilseed processing
activities, which principally include the origination and crushing
of oilseeds (including soybeans, canola, rapeseed and sunflower
seed) into protein meals and vegetable oils; the distribution of
oilseeds, oilseed products and fertilizer products through our port
terminals and transportation assets (including trucks, railcars,
barges and ocean vessels); fertilizer production; and biodiesel
production, which is partially conducted through joint
ventures.
The Merchandising business included in our
Agribusiness segment primarily consists of: global grain
origination activities, which principally include the purchasing,
cleaning, drying, storing and handling of corn, wheat and barley at
our network of grain elevators; logistical services for the
distribution of these com
modities to our customer markets through
our port terminals and transportation assets (including trucks,
railcars, barges and ocean vessels); and financial services
activities for customers from whom we purchase commodities, and
other third parties.
(3)
Mark-to-market timing difference comprises
the estimated net temporary impact resulting from unrealized
period-end gains/losses associated with the fair valuation of
certain forward contracts, readily marketable inventories (RMI),
and related futures contracts associated with our committed future
operating capacity. The impact of these mark-to-market timing
differences, which is expected to reverse over time due to the
forward contracts, RMI, and related futures contracts being part of
an economically-hedged position, is not representative of the
operating performance of our business.
(4)
A reconciliation of Cash provided by (used
for) operating activities to Adjusted funds from operations (FFO)
is as follows:
Six months ended June
30,
(US$ in millions)
2022
2021
Cash provided by (used for) operating
activities
$
(4,457
)
$
(1,436
)
Foreign exchange gain (loss) on net
debt
6
133
Working capital changes
5,585
2,454
Net (income) loss attributable to
noncontrolling interests and redeemable noncontrolling
interests
(27
)
(92
)
Mark-to-Market timing difference, after
tax
132
(159
)
Adjusted FFO
$
1,239
$
900
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220727005338/en/
Investor Contact: Ruth Ann Wisener Bunge Limited
636-292-3014 ruthann.wisener@bunge.com
Media Contact: Bunge News Bureau Bunge Limited
636-292-3022 news@bunge.com
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