Net sales during the quarter rose 12% to $10,345 million from $9,198 million. Analysts had expected sales of approximately $9,600 million during the quarter.
“Bunge’s first quarter improved significantly from where we were this time last year,” said Alberto Weisser, chairman and chief executive officer. “Agribusiness performed well, especially considering tight soybean supplies in Brazil that limited our origination activity in that country. In fertilizer, results were weaker than expected due to lower volumes and margins. However, our average inventory costs are now below market prices.”
Mr. Weisser said 2010 stands to be a transition year for Bunge’s sugar and biorefinery and retail fertilizer businesses as the company works through the integration of Moema and the separation of nutrients from retail.
“With the addition of Moema to our portfolio, sugar and biorefinery has become an important segment for Bunge with attractive growth potential,” he said. “It has increased our sugarcane milling capacity to 20 million metric tons and turned a complementary value chain into a core business that fits well with our strategy and capabilities.”
Agribusiness earnings before interest and tax were $122 million, up 336% from $28 million in the first quarter a year ago. First-quarter results included $14 million of impairment and restructuring charges related to the closing of an older, less efficient oilseed processing facility in the United States. Net sales in Agribusiness were $6,645 million, up 6% from $6,242 million.
Bunge said the improved results in agribusiness reflected solid performance in oilseed processing, which benefited from higher margins in most regions of the world. Grain origination results, meanwhile, were mostly lower due to the tight soybean situation in Brazil and slow farmer selling during the early stages of the harvest.
Bunge said its Fertilizer division sustained a loss of $40 million, which compared with a loss of $262 million in the same quarter a year ago. Net sales were unchanged at $699 million.
Bunge said results “improved significantly” year-over-year as the high cost inventory that impacted the business during 2009 was sold. Retail performance suffered in part due to lower margins and volumes, as farmers slowed purchases in the second half of the quarter even while Bunge maintained pricing.
Milling products earnings totaled $13 million on sales of $403 million, which compared with $19 million on sales of $376 million in the first quarter a year ago. Bunge said the most recent quarterly results included $3 million of impairment and restructuring charges related to the closing of a corn oil extraction line that was co-located with an oilseed processing facility that is being closed in the United States. Also affecting results were lower margins and higher operating expenses in wheat milling.
Earnings for Edible Oils products fell 18% to $18 million from $22 million. Sales in the unit rose 6%, climbing to $1,573 million from $1,490 million a year ago.
Earnings in the Sugar & Biorefinery segment totaled $5 million, which compared with a loss of $10 million a year ago. Net sales in the segment soared $162% to $1,025 million from $391 million.