26 April 2012 17:38 [Source: ICIS news]
HOUSTON (ICIS)--US agribusiness Bunge will continue to expand its sugar and ethanol production in Brazil in 2012, the company said on Thursday.
"Bunge expects to crush 17m-18m tonnes of sugarcane this year," said Bunge CEO Alberto Weisser in an earnings conference call with investors.
Weisser said Bunge is on track to reach more than 70,000 hectares (173,000 acres) of cane planting in 2012.
Earnings in sugar and bioenergy will reach their peak in the second half of the year, New York-based Bunge said.
Bunge operates eight sugarcane mills in Brazil with a combined capacity of over 20m tonnes that produce both sugar and ethanol, and are equipped via cogeneration to produce renewable electricity that can be sold to the Brazilian power grid.
Bunge reported that first-quarter net income fell year on year to $92m (€70m) from $232m as it faced lower margins and prices in volatile markets.
Earnings before interest and tax (EBIT) during the quarter also fell sharply to $138m from $317m in the same period last year, while Bunge's diluted earnings per share declined to $0.57 from $1.49.
Despite these steep falls, net sales for the quarter increased by 10% to $13.5bn from $12.2bn.
For the remainder of 2012, Bunge expects to realise strong results in its agribusiness segment.
"It is currently the high season for oilseed processing in South America, and good global demand for protein meal and vegetable oil should benefit oilseed processing margins in the region," said chief financial officer Drew Burke.
In the Northern Hemisphere, crush margins should improve from levels seen last year when the harvest begins in the second half of the year, Burke said.
China crush margins are expected by Bunge to improve throughout the year.
In grain merchandising, tight global grain stocks and the potential for a record US corn crop should keep facilities running at high utilisation levels come harvest, Bunge said.
Bunge expects its North American grain marketing and processing operations to benefit from the big corn crop.
US farmers are projected to plant 95.9m acres to corn this year, the most since 1937.
“Volatility should persist, but we feel confident that our risk management capabilities will enable Bunge to navigate the markets successfully,” Weisser said.
($1 = €0.76)
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