Bunge Net Income Ahead of Last Year

NEW YORK - Oct 23/08 - SNS -- Bunge Limited reported net income of U.S. $234 million on sales of $14,797 million during the third quarter ending September 30, compared to a net of $351 million on sales of $9,729 million during the same period last year.

This lifted fiscal year to date net income to $1,274 million on sales of $41,631 million, more than double the $533 million earned on sales of $25,370 million during the same nine month period of the previous fiscal year.

Alberto Weisser, Bunge's Chairman and Chief Executive Officer stated, "The third quarter was a volatile time in the global agribusiness and food markets, but the Bunge team managed through the period with skill. We head toward the end of 2008 with a comfortable liquidity position and continued expectations for record full-year results.

"Current conditions in the global agribusiness market are clearly different than the extraordinary ones experienced in the first half of the year. Comparatively, recent results have been pressured by softer demand for feed inputs and slower farmer selling in certain regions, as well as by reduced sales of fertilizer in Brazil.

"We see the current market environment as relatively short-lived. The basic fundamentals of our industry remain intact and should generate compelling growth for companies with global asset networks and broad product offerings. World population and living standards in developing economies continue to rise, and non-food uses for agricultural commodities are expected to increase. We expect that these factors will contribute to a rebound in overall demand. At the same time, ending stocks of agricultural commodities remain below historic norms, which will encourage the markets to maintain commodity prices at levels that provide incentives to farmers to plant larger areas and buy the nutrients necessary to generate higher crop yields."

Bunge's oilseed processing results were slightly lower in the quarter, as higher margins were more than offset by lower volumes. Softseed processing results in Europe and Canada were strong in the quarter, whereas demand for soybean products weakened. Slow farmer selling in the U.S. and Brazil due in part to volatility of commodity and currency prices, as well as harvest delays in the U.S., contributed to lower results in grain origination. Lower distribution results reflected margins that returned to more normal levels from the higher margins experienced in the third quarter of last year.

Fertilizer volumes were down in the quarter primarily due to soybean and corn farmers accelerating purchases in the first half of the year and a tight credit environment for farmers. Higher margins were more than offset by $215 million of foreign exchange losses resulting from the devaluation of the Brazilian real on U.S. dollar-denominated financing of working capital. Unlike in agribusiness where inventories are marked to market, the offsetting gain on fertilizer inventories is expected to occur in future quarters when the inventories are sold. Minority interest increased in the quarter due to higher results at Fosfertil.