Net sales during the quarter also improved, rising 18% to $12,194 million from $10,345 million.
“Bunge is off to a strong start in 2011,” said Alberto Weisser, chairman and chief executive officer. “Agribusiness and food and ingredients performed very well in the first quarter and sugar and bioenergy and fertilizer produced segment results generally in line with our expectations. The Brazilian sugarcane harvest is getting under way now, and all eight of our mills should be operating next week.”
Mr. Weisser said weather and trade policy continue to lead to tight supply and volatility in the agribusiness and food markets.
“While current conditions are likely to persist throughout the year, farmers around the world are responding to higher commodity prices with large plantings and ample use of crop inputs,” he said. “South American harvests are near record levels, and, weather permitting, U.S. farmers are expected to plant the largest acreage of major crops in nearly 25 years. Another season of large harvests will be an important step in rebuilding stocks and moderating prices.”
Agribusiness earnings before interest and tax were $253 million, up 107% from $122 million in the first quarter a year ago. First-quarter results in 2010 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 $8,123 million, up 22% from $6,645 million.
Bunge said the improved results in agribusiness reflected strong performance in grain merchandising, which benefited from strong global demand for U.S. and South American exports.
Bunge narrowed its loss in its Fertilizer division to $5 million from $40 million in the first quarter of fiscal 2010. Net sales, meanwhile, fell 29% to $494 million from $699 million.
Milling products earnings totaled $33 million, up 154% from $13 million in the same period a year ago. Net sales increased 24% to $500 million from $403 million.
“Higher results in the quarter were due to stronger margins in wheat and corn milling, as well as the contribution of our U.S. rice milling business, which we acquired in the fourth quarter of 2010,” Bunge said. “Wheat milling benefited from the combination of high local sales prices and low raw material costs, as much of our inventory was purchased prior to the rise in global wheat prices.”
Earnings for Edible Oils products rose 89% to $34 million from $18 million, while sales rose 28% to $2,016 million from $1,573 million.
Earnings in the Sugar & Biorefinery segment totaled $2 million, down from $5 million a year ago. Net sales in the segment finished higher, climbing 4% to $1,061 million from $1,025 million.
Looking ahead, Drew Burke, chief financial officer, said food and ingredients should continue to perform well.
“However, pricing pressures in edible oils will likely persist in certain markets, and wheat milling margins will likely decrease as low-cost raw material inventories are replaced at market prices,” he said.