Bunge income drops on charges

by Staff
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WHITE PLAINS, N.Y. — Income at Bunge Ltd. declined 97% during 2012 on hefty charges. Income for the year ended Dec. 31, 2012, was $28 million, equal to 19c per share on the common stock, which compared with $908 million, or $6.07 per share, during fiscal 2011. Sales for the year were $60,991 million, up 9% from $56,097 million during fiscal 2011.

For the fourth quarter ended Dec. 31, the company sustained a loss of $610 million, which compared with income of $245 million during the same quarter of the previous year. The company had sales of $17,040 million, up 9% from $15,692 million during the same quarter of the previous year.

During the fourth quarter the company had after-tax charges of $683 million, including a goodwill impairment charge of $327 million in the sugar and bioenergy segment, provisions of $298 million in discontinued operations relating to the pending sale of a fertilizer business, and a $49 million charge related to the sale of long-term recoverable taxes.

“The fourth quarter was weaker than expected, but looking at the full year, agribusiness achieved record EBIT of over $1 billion in a challenging, volatile period,” said Alberto Weisser, chairman and chief executive officer. “On an adjusted basis, this exceeded last year’s record year by 20%. After a slow beginning to the year, food and ingredients recovered and delivered a solid second half. And in fertilizer we took the important strategic step of agreeing to sell our Brazilian business for $750 million. This divestiture will create a more streamlined complement to our agribusiness operations with lower price risk. Sugar and bioenergy, however, continued to be challenged by negative margins in our Brazilian ethanol operations and the lingering impact of weather on sugarcane yields and ATR. While the non-cash impairment charge to goodwill that we were required to take under U.S. GAAP accounting rules is disappointing, it does not change our positive view of the business and our optimism about its future growth opportunities.”

For Agribusiness, fiscal 2012 EBIT rose to $1,047 million from $905 million, while sales rose 15% to $44,561 million from $38,844 million. During the fourth quarter ended Dec. 31 EBIT for the segment fell 71% to $58 million from $199 million, while sales increased 14% to $12,671 million from $11,123 million.

The Edible Oil Products segment had fiscal 2012 EBIT of $80 million, down 42% from $137 million during the previous year, and sales of $9,472 million, up 7% from $8,839 million. For the fourth quarter EBIT fell 38% to $28 million from $45 million, while sales increased 10% to $2,525 million from $2,286 million.

Bunge said full-year EBIT within its Milling Products division increased 11% to $115 million, up from $104 million in fiscal 2011. Net sales for the year fell 9% to $1,833 million from $2,006 million. For the fourth quarter, EBIT was $14 million, down 44% from $25 million during the previous year’s fourth quarter, and sales were $500 million, up 2% from $490 million.

Bunge sustained a loss of $637 million in the Sugar and Bioenergy segment during fiscal 2012, which compared with a loss of $20 million during fiscal 2011. Net sales declined 25% to $4,659 million from $5,842 million. For the fourth quarter, the segment suffered a loss of $529 million, which compared with income of $3 million during the same quarter of the previous year. Fourth-quarter sales totaled $1,177 million, a decline of 28% from $1,630 million.
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