Dive Brief:
- Thursday, Bunge Limited posted posted $11.1 billion in revenue, falling short of the $11.85 billion Thomson Reuters estimate. Revenues fell to $11.13 billion from $13.23 billion. The company was impacted by soybean prices in the United States and weakened demand in Brazil for products such as wheat, according to a news release. It reported $203 million in profit.
- Bunge’s food and ingredients unit expects higher results due to performance improvement related benefits of nearly $50 million. Acquisitions are expected to also increase performance. The company’s Brazilian operations expect to face headwinds, but officials see promise in areas like U.S. packaging and India oils.
- With the USDA forecasting global soybean meal and oil demand to increase 7% and 5%, respectively,"we expect agribusiness to start the year slow and results to be weighted toward the second half of the year," said Drew Burke, CFO, in a statement.
Dive Insight:
Bunge reported oilseed results lower than last year, even though soybean processing was higher in Brazil, Argentina, Europe and Asia; the results in the United States were softened in anticipation of Argentine supply, according to a statement. Rival company Archer Daniels Midland reported similar comments when it released its recent earnings statement.
Bunge sees positive signs in regard to global demand for its core products, with Brazil expected to grow large soy and corn crops, which will support a good "crush margin," and export margins. Argentina’s farmers are expected to improve selling, which will allow Bunge to “operate our crushing and port assets at higher utilizations," said Soren Schroder, CEO, in a statement.
Bunge North America expanded its oil line by purchasing Whole Harvest Foods, LLC, in October. Whole Harvest uses expeller-pressed canola, cottonseed, and soy oils to make products such as frying oils, pan sprays, and liquid butter alternatives. The Whole Harvest Foods purchase adds to Bunge's line of trans fat-free oils at a time when companies are looking for options to comply with the FDA decision on partially hydrogenated oils.