28 April 2011 18:17 [Source: ICIS news]
HOUSTON (ICIS)--Good farm economics and an expanding need for ethanol in Brazil will help US agribusiness Bunge achieve its financial targets in the second half of 2011, the company said on Thursday.
"Tight sugar supplies and strong demand for ethanol in Brazil will move Bunge's business forward," Bunge chief executive Alberto Weisser said.
Earlier Thursday, Bunge reported that first-quarter 2011 net income more than tripled year on year to $232m (€158m) because of strong performance in its agribusiness and food and ingredients segments.
Net sales were up by 18% to $12.2bn while operating profit (earnings before interest and tax, EBIT) surged to $317m from $118m in the same period in 2010.
Operating profit in the company’s agribusiness sector more than doubled to $253m from $122m in the corresponding period last year.
Brazil is currently encouraging producers to expand ethanol production to satisfy increasing demand, Weisser said.
Bunge operates eight sugar mill ethanol plants in Brazil.
"In agribusiness, the favourable environment for our grain merchandising business should continue," said Bunge chief financial officer Drew Burke.
Oilseed processing margins in South America should benefit from higher utilisation now that harvest is underway, and margins in Europe should improve later in the year when stocks are replenished during harvest, Burke said.
However, margins in the US are likely to remain under pressure as a result of excess capacity of soybean meal processing.
Argentine oilseed crush margins should also improve in the second half of 2011, Weisser said.
Weisser added that Bunge has felt no impact from the recent catastrophic events in Japan.
($1 = €0.68)
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