ST. LOUIS — While Bunge’s Agribusiness continues to adapt to dynamic, rapidly changing market conditions, the company’s Refined and Specialty Oils business is benefiting from favorable demand trends as well as supply chain and innovation capabilities, executives with the St. Louis-based company said on April 27.
Bunge net income in the first quarter ended March 31 was $688 million, equal to $4.48 per share on the common stock, down 17% from $831 million, or $5.52 per share, in the first quarter of fiscal 2021. Sales totaled $15.88 billion, up 23% from $12.96 billion a year ago.
On an adjusted basis, earnings per share were $4.26 in the first quarter of fiscal 2022, up from $3.13 in the same period a year ago. The strong first quarter led Bunge to raise its full-year adjusted EPS to at least $11.50, up from its forecast of $9.50 in January, reflecting “stronger-than-expected Q1 results and current forward crush curves.”
Following the release of the financials, shares of Bunge climbed as high as $121.78, up 6% from the previous day’s close of $114.86.
“We continue to build on our positive momentum, delivering year-over-year earnings growth for the tenth consecutive quarter, with all segments of the business contributing to the strong performance,” Gregory A. Heckman, chief executive officer, said during an April 27 conference call with analysts. “While we incurred losses in our Black Sea operations, our team effectively responded to the situation when industry margins spiked globally due to the combination of continued strong demand and an even tighter supply outlook.”
During the first quarter of fiscal 2022, segment EBIT within Agribusiness totaled $699 million, down 16% from $836 million in the same period a year ago. Adjusted segment EBIT, though, was $627 million in the first quarter of fiscal 2022, up from $601 million in the same period a year ago. Sales increased 15% to $11.23 billion from $9.79 billion, while volumes fell to 20.07 million tonnes from 21.64 million tonnes a year ago.
“Agribusiness started the year strong,” said John W. Neppl, executive vice president and chief financial officer. “In processing, the US, Europe and Brazil reported higher soy crush results, benefiting from improved margins due to strong demand. Those results were partially offset by lower results in softseed crush in Europe and China, which were negatively impacted by tight seed supplies and higher costs.
“Merchandising had a good quarter. However, results were down compared to a very strong prior year, reflecting lower results in our global grains and financial services operations.”
In the Refined and Specialty Oils segment, EBIT was $173 million, down 44% from $308 million a year ago. Adjusted segment EBIT, meanwhile, was $180 million, up from $124 million a year ago. Sales were $3.98 billion, up 46% from $2.73 billion, while volumes were 2.3 million, up from 2.18 million tonnes.
Mr. Neppl said higher results in the quarter primarily were driven by improved margins and volumes in North America, which benefited from strong food and fuel demand. Results in the other regions were slightly lower compared to the prior year, he said.
Milling segment EBIT totaled $50 million, up sharply from $8 million a year ago. Adjusted segment EBIT was $51 million, up from $12 million. Sales also were significantly higher, surging to $603 million from $390 million. Volume increased to 1.16 million tonnes from 1.04 million tonnes.“Higher results in the quarter were driven by South America, which benefited from higher milling and upstream origination margins, partially offset by increased industrial costs,” Mr. Neppl said. “Higher margins and volumes in the US also contributed to the improved performance.”