Bunge sees earnings double in Q3
food industry, today reported that earnings more than doubled in
its third quarter on the back of strong market conditions.
Net income for the quarter ended September 30 2007 shot up 108 percent to reach $351m, compared to $169m last year. Net sales stood at $12.7bn, up 82 percent from the prior year period. According to the company's chairman and chief executive officer Alberto Weisser, the firm's results were "exceptional", and were partly driven by improved agribusiness operations across the board. Improved agribusiness performances in Europe and South America were driven by higher grain origination and oilseed processing margins. North America benefited from strong grain export volume. Higher results in the quarter were mainly due to increased volume and improved product mix in corn milling. However, edible oil results were not as encouraging. According to Bunge, these were negatively impacted by higher operating expenses, which include investments to grow the business in Europe and Asia, where volumes and margins have not yet reached the critical mass level to support improved results. Margins in Europe were negatively impacted by high raw material costs, but were partly offset by margin improvements in other parts of the world. The firm said its third quarter results benefited from integration. "Opportunities to create value can appear at different points on the chain depending upon market conditions. Recently, we have seen a temporary shift from food products to agribusiness. Having an integrated business that stretches from farm to retail shelf enables Bunge to capture value at numerous points," said Weisser. "We will continue to enhance the integration of our operations, while expanding into new areas and products, such as sugar." "Earlier this month we closed on the acquisition of our first sugarcane mill and ethanol production facility in Brazil. The acquisition represents an important step in our strategy to become a global and fully integrated player in the sugar value chain. It extends Bunge's activities beyond sugar trading and marketing and complements our existing agribusiness and logistics activities in the region." Bunge's strong third quarter results prompted the firm to increase its full year 2007 net income guidance by $60m to $690m.
