US Bunge Q4 net income drops 16% on ‘significant headwinds’

09 February 2012 12:34  [Source: ICIS news]

LONDON (ICIS)--Bunge’s fourth-quarter net income fell by 16% year on year to $245m (€183.8m) partly because of reduced sugarcane production yields in Brazil, the US agribusiness and food production company said on Thursday.

Fourth-quarter net sales rose to $16.45bn from $12.73bn in the same period in 2010, while gross profit in the fourth quarter fell 11% year on year to $736m.

“In 2011, Bunge produced strong results in many parts of our business, but faced significant headwinds in others,” said Alberto Weisser, Bunge’s chairman and CEO.

Weisser said that in 2011, on a combined basis, Bunge’s agribusiness, edible oils and milling segments generated record full-year earnings before interest and tax of over $1.1bn.

“However, reduced sugarcane production yields in Brazil, due to back-to-back years of poor weather, had a material impact on volumes in our sugar and bioenergy segment,” he added.

For the full year ended 31 December 2011, Bunge’s net income tumbled to $908m from $2.29bn in 2010, while net sales rose 29% year on year to $58.74bn.

Looking ahead, Weisser sees some challenges early in 2012, but still expects the company to generate good results for the full year: “We see positive signs in the industry and have confidence in our business ... Production and trade of agricultural commodities are expected to increase.”

“We expect a significant improvement in results that will be second-half weighted, driven by higher volume and additional cost reductions,” said Drew Burke, chief financial officer.

“Additionally, we expect the following for 2012: depreciation, depletion and amortisation of approximately $575m; capital expenditures of approximately $1.2bn – approximately 25% of which will be invested in maintenance, safety and environmental projects – and a full-year tax rate of 8–10%.”

($1 = €0.75)

Read Paul Hodges’ Chemicals and the Economy blog

By: Franco Capaldo
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