Agricultural processor Bunge Ltd. reported higher-than-expected fourth-quarter profit and revenue on strength in grain merchandising.
Bunge’s grain marketing, storage and transportation operations benefited from rising global demand for food amid thinning stocks, and the company said it was able to withstand highly volatile commodities markets with favorable futures hedge positions.
Bunge reported a net profit of $292 million, or $1.95 per share, available to common shareholders. On that basis, it lost $28 million, or 21 cents per share, a year earlier.
Excluding one-time items, earnings were $1.99 per share, handily beating the average analyst estimate of $1.59 per share, according to Thomson Reuters I/B/E/S.
Revenue rose to $12.73 billion from $10.44 billion, topping the average analyst estimte of $12.10 billion.
“Solid results in agribusiness and food and ingredients were offset somewhat by difficulties in sugar and bioenergy,” said Bunge Chairman and CEO Alberto Weisser.
Bunge’s agribusiness segment, its largest, posted a $377 million profit in the fourth quarter, up sharply from $65 million a year earlier when drought-thinned South American oilseed supplies weighed on results.
Reduced sugarcane processing in Brazil following a drought last year which cut cane yields, and challenges with the start-up of two mills during the quarter, resulted in a $56 million net loss for Bunge’s sugar and bioenergy segment. The segment lost $5 million a year earlier.
Earnings in edible oil products narrowed to $45 million, from $114 a year ago. Milling products segment results slipped to $14 million on a one-time impairment charge, down from $18 million a year earlier.
Improved margins offset lower volumes in Bunge’s fertilizer segment, which earned $1 million in the quarter. A year ago, poor demand and weak margins resulted in a $174 million loss in fertilizer.
Bunge, based in White Plains, New York, is one of the world’s largest agricultural processors and among the top sugar and ethanol producers in South America.
Shares of Bunge rose to $70.20 in premarket trading from Wednesday’s New York Stock Exchange close of $69.78.
