Bunge annual income rises despite fourth-quarter loss

by Jeff Gelski
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WHITE PLAINS, N.Y. —Bunge Ltd.’s net income for the fiscal year ended Dec. 31 rose 37% even though the company suffered a fourth-quarter loss, Bunge said Feb. 5. Fiscal-year net income of $1,064 million, equal to $7.73 per share on the common stock, compared with $778 million, or $5.95 per share, in the previous year. Fiscal-year sales rose 39% to $52,574 million from $37,842 million.

In the fourth quarter, however, Bunge suffered a loss of $210 million, which compared with fourth-quarter net income of $245 million in the previous year. Fourth-quarter net sales declined 12% to $10,943 million from $12,472 million.

"In 2008, Bunge produced record results in one of the most volatile years in recent memory," said Alberto Weiser, chairman and chief executive officer. "We earned over $1 billion in net income for the first time and produced $2.5 billion of cash flow from operations."

For fiscal year 2009, Bunge set earnings guidance at $6.90 to $7.60 per share. Bunge’s stock on the New York Stock Exchange opened at $42.19 per share on Feb. 5 and was up 4.3% to $44.44 in trading that morning.

Three of Bunge’s four business divisions posted fiscal-year earnings before income and tax (EBIT). Edible Oil Products, however, suffered an $11 million loss, which compared with EBIT of $45 million in the previous fiscal year. Edible Oil Products lost $47 million in the fourth quarter, which compared with EBIT of $4 million in the previous fourth quarter. Results declined in the fourth quarter primarily because of high raw material costs in Europe.

Agribusiness fiscal-year EBIT rose 11% to $949 million from $856 million. Agribusiness suffered a fourth-quarter loss of $86 million, which compared with EBIT of $330 million in the previous year’s fourth quarter. Lower results in soybean processing in the fourth quarter more than offset strong softseed processing results in Europe.

Fiscal-year EBIT for Milling Products rose 189% to $104 million from $36 million. Milling Products posted fourth-quarter EBIT of $18 million, which compared with a fourth-quarter loss of $12 million in the previous year. Fourth-quarter results in 2007 included a $13 million impairment charge related to the closing of a wheat milling facility in Brazil.

Fertilizer fiscal-year EBIT rose 18% to $321 million from $271 million, but in the fourth quarter Fertilizer sustained a $289 million loss, which compared with EBIT of $52 million in the previous fourth quarter.

Companywide in 2009, Bunge expects $425 million to $445 million in depreciation, depletion and amortization; $950 million to $1,050 million in capital expenditures; and a tax rate of 22% to 26%.

"Looking ahead, we are confident in a solid 2009," said Jacqualyn Fouse, chief financial officer. "The first half of the year will present challenges as we face a soft market environment and work through higher cost inventories in fertilizer and certain regions of our edible oils business. We expect stronger results in the second half as soybean meal demand improves."

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