In the second quarter, bundle profits jumped.
According to chief executive officer Gregory A. Heckman, Bunge’s net income surged in the second quarter as the St. Louis-based company used its adaptability to maneuver in a dynamic environment.
During a conference call with analysts on August 2, Mr. Heckman stated, “We were able to use our footprint and value chain connectivity to optimize margins as market conditions changed later in the quarter.” Although volatility can present possibilities, it is hard to forecast when and where in the value chain those chances for profit would materialize. Nonetheless, we are confident in our capacity to generate value in the long run because of our track record of success in quickly evolving situations. Our maintenance and productivity efforts also paid off, as we observed increased dependability and a decrease in maintenance and production with increased dependability and a decrease in unscheduled platform downtime.
Bunge reported net income of $622 million for the second quarter that ended on June 30, or $4.09 per share on common stock. This is a significant increase from $206 million, or $1.34 per share, for the same period the previous year. The mark-to-market timing difference charge of $233 million and other costs totaling $68 million were included in the quarterly results from the previous year. The adjusted earnings for the second quarter of the prior year were $3.72 per share, a 25% increase from $2.97 per share. Compared to $17.93 billion in the same period last year, net sales in the second quarter of this year were $15.05 billion, a 16% decrease.
EBIT for Bunge’s agribusiness increased to $785 million in the second quarter of 2022 from $93 million. After deducting certain charges and a mark-to-market timing discrepancy, EBIT increased by 75% to $674 million from $386 million in the corresponding quarter of the prior year. Volume dropped from 19.49 million tons to 18.26 million tonnes, a 6.4% reduction.
“By virtue of our destination crush operations in Europe and Asia and our robust soybean origination from Brazil, we were able to achieve better year-over-year performance across all value chains in Processing during the quarter,” stated Chief Financial Officer John W. Neppl. “We started the quarter with a large percentage of our capacity locked in at higher margins, therefore the results in the US were also better.
“In Merchandising, lower results in our financial services and ocean freight operations, which had difficult comparisons to a particularly strong prior year, more than offset higher results in global oils and grains.”
The second-quarter EBIT of the Refined and Specialty Oils business, $217 million, was essentially unchanged from the $218 million recorded in the same period last year. From $4.45 billion to $3.6 billion, net sales decreased 19%. Volumes decreased from 2.32 million tons to 2.21 million tonnes. According to Bunge, somewhat weaker results in Europe, South America, and Asia were offset by improved performance in North America driven by the foodservice and gasoline demand.
EBIT for the Milling division was $14 million, a decrease from $97 million. From $677 million to $490 million, net sales decreased by 28%. Volume was 844 million tonnes, which was 26% less than the 1.14 million tonnes in the second quarter of the previous year. A small Argentine wheat harvest had a negative impact on the company’s South American business, which was the main cause of the quarter’s lower earnings, according to Bunge.
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Bunge reported net income of $1.25 billion, or $8.24 per share, for the first half of the fiscal year, a 40% increase from $894 million, or $5.81 per share, during the same period the previous year. Net sales for the first half of the year decreased by 10% to $30.38 billion from $33.8 billion.
After the first-quarter results were released, Bunge revised its full-year 2023 adjusted EPS prediction to $11.75 per share, accounting for the first-half results and the current margin environment.