Bunge Reports Q1 Loss

NEW YORK - May 1/14 - SNS -- Bunge Limited reported a net loss of $13 million on sales of $13,461 million for the first quarter ending March 31, compared to a net profit of $180 million of $14,785 million during the same three-month period last year.

Soren Schroder, Bunge's Chief Executive Officer stated, "The first quarter was slower than expected, but our outlook for the remainder of the year is positive. Results in the quarter were primarily impacted by losses in our grain trading and distribution business that are behind us and a temporarily depressed crushing environment in China.

"The global agribusiness and food markets, despite some challenges, look strong with solid demand and crush margins in most regions. Soybean harvests in South America are large, and farmers, particularly in Argentina, have increased their commercialization of crops. Our team in Brazil is doing a first-rate job managing market risks and optimizing logistics flows, which has positioned us well for executing on this harvest. Farmers in the Northern Hemisphere are expected to plant large crops this spring, which should drive strong asset utilization and exports later in the year."

Bunge reported that strong grain origination results in Brazil were offset by losses in the company's trading and distribution operations. Bunge had expected lower grain prices, but deteriorating U.S. winter wheat conditions combined with Black Sea political volatility to push prices higher, pressuring margins on positions in futures markets.

Additionally, ocean freight costs were above market as Bunge executed higher priced vessels that were toward the end of their time charter contracts.

By contrast, oilseed processing margins in Europe, Brazil and the U.S. were strong, helping offset poor results in China.

In its sugar and bioenergy division, Bunge noted that the first quarter is the inter-harvest period in Brazil when sugarcane mills in the Center-South region typically do not operate and are selling sugar and ethanol inventories from the previous sugarcane harvest.

"Results in both our cane milling and trading and distribution businesses were lower than last year. In sugarcane milling the primary drivers of the difference were approximately $31 million of mark-to-market losses related to hedges on our forward sugar sales and higher start-up costs, which last year were mostly incurred in the second quarter due to the later start to the milling season.

"Results in our trading & merchandising business were lower than a strong year-ago period. Results in our biofuels business were higher than last year primarily due to the favorable ethanol margin environment in the U.S. and the contribution from our new corn wet milling joint venture in Argentina."