WHITE PLAINS, N.Y. — Timing differences in soy crush margins and a stake in Beyond Meat, Inc. benefited Bunge, Ltd. in the second quarter ended June 30.
Companywide, White Plains-based Bunge had net income of $214 million, equal to $1.43 per share on the common stock, in the quarter compared with a loss of $12 million in the previous year’s second quarter. Net sales of $10,096 million were down 29% from $12,147 million. Bunge’s stock on the New York Stock Exchange was trading at $58.73 per share early in the afternoon on July 31, which was up 4.2% from a close of $56.36 on July 30.
A net unrealized gain of $135 million in the quarter came from Bunge Ventures’ stake in Beyond Meat, Inc. Bunge Ventures is the company’s venture capital unit. Los Angeles-based Beyond Meat produces plant-based meat substitutes.
“We haven’t discussed ventures often, but it’s an important vehicle as the competitive landscape and consumer preferences drive change and as technology continues to accelerate innovation and transparency in our industry,” said Gregory A. Heckman, chief executive officer of Bunge, in a July 31 earnings call.
In Agribusiness, adjusted EBIT of $189 million in the second quarter was up 60% from $118 million. Net sales of $7,068 million were down 19% from $8,725 million. Agribusiness benefited from about $70 million in timing differences in soy crush, along with increased soy crush volumes. Soy crush margins decreased in many markets toward the end of the quarter, creating mark-to-market profit in hedge contracts, said John W. Neppl, chief financial officer of Bunge.
“As we execute on the physical business, these gains will effectively be offset by lower realized margins, mostly in the third quarter,” he said.
Within Agribusiness, oilseeds registered adjusted EBIT of $164 million, which was up 17% from $140 million, and grains had adjusted EBIT of $25 million, which compared with a loss before interest and taxes of $22 million in the previous year’s second quarter. In grains, origination results improved in South America, which more than offset lower results in North America. A combination of extreme weather and low export demand, brought on by the U.S.-China trade disputes, negatively impacted North American results for grains.
The bad U.S. weather had a negative effect of about $13 million in the second quarter, Mr. Neppl said.
“The big driver is logistics obviously at the river system and then farmer willingness around whether to hold off on soybeans, waiting to see what was going to happen with this year’s crop,” he said.
In Food and Ingredients, adjusted EBIT of $49 million was up 7% from $46 million in the previous year’s second quarter as strength in edible oils offset weakness in milling. Net sales of $2,206 million in edible oils were down 5% from $2,325 million. In milling, lower volumes and margins had a negative effect in Brazil. Net sales of $430 million were up 0.9% from $426 million.