US Bunge swings to Q4 net loss of $610m on after-tax charges

07 February 2013 12:30  [Source: ICIS news]

LONDON (ICIS)--Bunge swung to a fourth-quarter net loss of $610m (€451m) from a net profit of $245m in the same period the year before following after-tax non-cash charges of $683m, the US agribusiness and food production company said on Thursday.

The after-tax non-cash charges primarily includes a goodwill impairment charge of $327m in the group’s sugar & bioenergy segment, provisions of $298m in discontinued operations related to a pending sale of the group’s Brazilian fertilizer business, and $49m related to the sale of long-term recoverable taxes, the company said.

Sales for the three months ended 31 December increased by 8.6% year on year to $17.0bn, while total segment earnings before interest and tax (EBIT) swung to a loss of $414m, from a profit of $295m reported in the fourth quarter of 2011.

Alberto Weisser, Bunge's chairman and CEO stated, "The fourth quarter was weaker than expected, but looking at the full year, agribusiness achieved record EBIT of over $1bn in a challenging, volatile period.

In December, fertilizer giant Yara International announced it will acquire Bunge's fertilizer business in Brazil for $750m.

“After a slow beginning to the year, food & ingredients recovered and delivered a solid second half. And in fertilizer we took the important strategic step of agreeing to sell our Brazilian business for $750m. This divestiture will create a more streamlined complement to our agribusiness operations with lower price risk,” Weisser said on Thursday.

For the full year ended 31 December 2012, Bunge’s net income tumbled to $28m from $908bn in 2011 despite net sales rising 8.7% year on year to $61.0bn.

Looking ahead, Drew Burke, CFO, expects a much improved year in 2013.

"… we expect the following for 2013: depreciation, depletion and amortization 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 17% to 20%."

($1 = €0.74)

By: Franco Capaldo
+44 (0)20 8652 3214

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