WHITE PLAINS, N.Y. — Despite a loss of $21 million in the first quarter ended March 31, Bunge Ltd. results came in “stronger than expected” when excluding mark-to-market on committed crush, Soren W. Schroder, chief executive officer, said during a May 2 conference call with analysts.

The loss of $21 million in the first quarter compared with income of $47 million, equal to 27c per share on the common stock, in the same period a year ago.

Sales were $10,641 million, down 4.4% from $11,121 million.

Charges in the first quarter included $14 million for severance, benefits and other costs (zero in 2017); $3 million for acquisition and integration costs in the Edible Oil Products division (zero in 2017); and $3 million in sugar restructuring charges ($6 million in 2017). Overall, special charges totaled $19 million in the first quarter of 2018, versus charges of $6 million in the first quarter of 2017.

“First-quarter results came in stronger than expected when excluding mark-to-market on committed crush and signal in a way to transition into a period of much improved margins and performance, especially in soy crush,” Mr. Schroder said. “Our teams took advantage of a quickly changing environment, and we have positioned the company for very strong performance in the balance of the year.

Soybean spill“The combination of much reduced soybean availability in Argentina and strong underlying consumption of both protein and oils has increased demand for and, therefore, margins of soil crush capacity in other regions, especially in the United States and in Europe. Shift in trade flows of both soybeans and soy products as well as corn are putting a premium on our logistics assets and distribution capabilities, and more dynamic markets have wider margins across the value chains.”

Mr. Schroder said Bunge’s global footprint “is built for this type of environment,” noting the company can direct capacity and trade flows between origins to serve its global customer base during periods of rapid market shifts and volatility.

Bunge’s largest division, Agribusiness, had EBIT in the first quarter of 2018 of $42 million, down 62% from $109 million in 2017. Agribusiness volumes were 35,805,000 tonnes, up narrowly from 35,023,000 in the first quarter a year ago. Sales were $7,462 million in the first quarter of 2018, down 5% from $7,819 million.

Thomas M. Boehlert, executive vice-president and chief financial officer, said during the call that improved results in grains were more than offset by lower results in Bunge’s oilseeds business.

“In oilseeds, soy crush margins expanded significantly over the course of the quarter as compared to 2017’s depressed levels, driven by a combination of strong soymeal demand and crush capacity constraints resulting from the drought in Argentina,” Mr. Boehlert said.

He said higher results in grains reflected global trading and distribution, which benefited from increased margins and effective risk management. He added that origination results were comparable to 2017, as improved performance in Brazil offset lower results in North America and Argentina.

Soybeans and soybean oilEBIT of the Bunge Edible Oil Products division was $28 million in the first quarter of 2018, down 23% from $36 million in the same period a year ago. Sales were $2,149 million for the quarter, up 14% from $1,880 million.

EBIT of the Milling Products division totaled $17 million in the first quarter of 2018, up 89% from $9 million a year ago. Net sales increased to $409 million from $382 million.

“Results were better in all regions, with the biggest improvement seen in North America,” Mr. Boehlert said. “In Mexico, results benefited from double-digit volume growth and lower costs. Improved results in the U.S. were due to higher margins. And results in Brazil were slightly higher than last year as higher volume and lower costs more than offset lower margins. We’re starting to see signs of improvement in Brazil as the market transitions to a smaller wheat crop and the economic environment slowly improves.”

Mr. Boehlert said Bunge continues to maintain “strict discipline” on CapEx spending. During the first quarter the company invested $105 million, with approximately one-third going to sugarcane planting and one-third to other agri-segment investments.

Looking ahead, Mr. Boehlert said Bunge is increasing its full-year outlook for its Agribusiness division to $800 million to $1 billion, up from $550 million to $700 million.

“Underlying demand for soymeal remains strong, which, even at higher prices, has not priced itself out of formulations, remaining competitive with other proteins such as DDGS and feed wheat,” he said. “Argentina crushers have been and are expected to continue to crush in alignment with farmer selling, which has improved margins in Argentina significantly as compared to last year. There are ample soybean supplies in Brazil and the U.S., which should allow our crush plants in these regions as well as in Europe to run at higher capacity levels through the year. And we believe others entered the year with reduced logistics commitments, allowing us to better adapt to the pattern of farmer selling.”

Bunge also has increased its outlook for Food & Ingredients to $290 million to $310 million, up from $260 million to $280 million. Mr. Boehlert said the increase primarily reflects the addition of Bunge’s 70% interest in Loders Croklaan for the 10-month period.