ST. LOUIS — Solid progress on growth initiatives and its pending strategic combination with Viterra prompted Bunge Ltd. to raise its full-year adjusted earnings-per-share outlook for fiscal 2023 to at least $12.50, up from an earlier forecast of $11.75 per share issued in early August. The bump up in adjusted EPS came against a backdrop of slightly lower year-over-year earnings at the St. Louis-based company in the third quarter.
In the third quarter ended Sept. 30, net income attributable to Bunge eased to $373 million, equal to $2.47 per share on the common stock, down 1.9% from $380 million, or $2.49 per share, in the year-ago quarter. Adjusted EPS for the quarter was $2.99, down 13% from $3.45 a year ago.
Net sales, meanwhile, fell 15% to $14.23 billion from $16.76 billion a year ago.
“Our reported results include a negative mark-to-market timing difference of 14¢ per share and a negative impact of 38¢ per share, primarily related to acquisition and integration costs associated with our announced business combination agreement with Viterra,” John W. Neppl, chief financial officer, said during an Oct. 26 conference call with analysts.
Following the release of results, Bunge’s share price climbed as high as $108.27 in mid-day trading on Oct. 26, up 5.9% from the close of $102.18 on Oct. 25.
In Bunge’s largest division, Agribusiness, adjusted segment EBIT for the quarter was $472 million, down 11% from $528 million in the year-ago quarter. Agribusiness volumes were 18.85 million tonnes compared with 19.62 million tonnes in the third quarter of 2022. Sales were $10.08 billion, down 14% from $11.74 billion in the third quarter a year ago.
“Agribusiness adjusted results of $472 million were down compared to last year as a slightly higher performance in processing was more than offset by lower results in merchandising,” Mr. Neppl said. “In processing, higher results in Brazil soy origination, Asia and North America were largely offset by drought-impacted results in Argentina. Results in Europe were in line with last year as improved performance in soft seeds was offset by lower results in soy crush. In merchandising, higher results in our global corn value chain, which benefited from the large Brazilian safrinha corn crop were more than offset by lower results in financial services and our global wheat value chain.”
Adjusted EBIT of the Refined and Specialty Oils division was $230 million, up 18% from $195 million in the third quarter of 2022. Sales in the quarter were $3.6 billion, down 16% from $4.3 billion.
“Higher refining specialty oils results were primarily driven by North America,” Mr. Neppl said. “Higher results in Asia, led by our India business also contributed to the improved performance. Results in South America and Europe were lower.”
In the Milling division, adjusted EBIT was $33 million, up 94% from $17 million in the third quarter of 2022. Net sales, though, fell 24% to $479 million from $631 million.
“In Milling, higher results were primarily driven by our South American operations, reflecting improved margins due to the combination of lower wheat costs and more favorable channel mix,” Mr. Neppl said. “Results in the US were also higher.”
Looking ahead to the longer term, Gregory A. Heckman, chief executive officer of Bunge, noted that the fundamental drivers of Bunge’s business remain in place.
“Global population continues to grow, and the need for sustainable solutions to meet that demand means the world will continue to look to Bunge to supply essential products and services to the feed, food and fuel industries,” he explained. “Our strategic combination with Viterra will help us accelerate our long-term growth with greater diversification across customers, assets, geographies and crops, we’re creating a platform with enhanced efficiencies, connectivity and capabilities across value chains. This will provide us with more optionality and allow us to even better serve the needs of both farmers and end consumers regardless of market environment.
“In addition, we’re continuing to progress on our other important growth initiatives, including enhancing our footprint with targeted greenfield and bolt-on acquisitions, deepening our relationships with customers at both ends of the value chain, strengthening our digital capabilities and investing in innovative and sustainability-oriented programs and products. In Brazil, we reached an agreement to acquire CJ Selecta, a leading manufacturer and exporter of soy protein concentrate in Brazil. Construction is also progressing well on our soy protein concentrate plant in Morristown, Ind., and we’re nearly ready to begin serving customers from our new highly efficient multi-oil facility in India.”
In the nine months ended Sept. 30, net income attributable to Bunge increased to $1.63 billion, or $10.71 per share, up 28% from $1.27 billion, or $8.30 per share, in the same period a year ago. Adjusted EPS for the nine months was $9.97, down from $10.66 a year ago.
Net sales, meanwhile, fell 12% to $44.6 billion from $50.57 billion a year ago.