Create a free Feed & Grain account to continue reading

Bunge Lifts 2022 Earnings as Ukraine War Tightens Supplies

Two-month-old war boosted demand, lifted crop processing margins for company

2 Lisa Selfie December 2020 Headshot
Felix Mittermeier | PEXELS
Felix Mittermeier | PEXELS

On Wednesday, Bunge reported a higher quarterly adjusted profit and raised its full-year earnings forecast by 21% on robust demand and tighter supplies of essential crops since Russia's invasion of Ukraine.

Reports suggests the two-month war has exacerbated already thin supplies of grain and oilseeds after weather-reduced crops in South America and other key production areas, boosting demand and lifting crop processing margins for Bunge.

Bunge's results mirrored strong earnings from ADM on Tuesday. ADM predicted global supplies of key crop staples will remain tight for at least two years after harvest shortfalls in some countries and shipping disruptions triggered by Russia's invasion of Ukraine.

“I am very proud of our team’s continued agility and dedication to ensuring key food, feed and fuel products are getting from farmers to consumers as we navigate this unprecedented global market, further intensified by the war in Ukraine," said Greg Heckman, Bunge's CEO.

"In addition to our corporate humanitarian contributions, our global team continues to actively support our colleagues in the region during this difficult time, including volunteering to assist displaced colleagues and their families with shelter, food and other critical needs.

From a business standpoint, Heckman says the changes the company has made to its operating model have enabled it to provide innovative solutions to customers on both ends of the supply chain and help them respond to the highly dynamic and challenging environment.

"While we expect market conditions to continue shifting, I am confident we have the right team and platform in place to execute our critical role in the global agriculture and food supply chains," he said.

Bunge raised full-year adjusted earnings guidance to $11.50/share, from $9.50 previously, and said the guidance had "upside potential" as tight supplies and strong demand persist.

Other points highlighted in Bunge's report include:

  • Q1 GAAP EPS of $4.48 versus $5.52 in the prior year; $4.26 versus $3.13 on an adjusted basis excluding certain gains/charges and mark-to-market timing differences
  • Agribusiness continues to adapt to dynamic, rapidly changing market conditions while connecting farmers to global consumers
  • Refined and Specialty Oils benefiting from favorable demand trends, as well as supply chain and innovation capabilities
  • Increasing full-year adjusted EPS outlook to at least $11.50 based on stronger than expected Q1 results and current forward crush curves
Page 1 of 354
Next Page