Bunge Limited (NYSE: BG) today reported third quarter 2023
results
- Q3 GAAP diluted EPS of $2.47 vs. $2.49 in the prior year;
$2.99 vs. $3.45 on an adjusted basis excluding certain
gains/charges and mark-to-market timing differences
- In Agribusiness higher Processing results were more than
offset by lower results in Merchandising
- Higher Refined and Specialty Oils results driven by strength
in North America
- Significant progress on Viterra transaction and other growth
initiatives
- Repurchased ~$600 million of common shares since Q2
- Increasing full-year adjusted EPS outlook to at least
$12.50
Greg Heckman, Bunge’s Chief Executive Officer, commented, “Our
team remained focused on executing our day-to-day business to
deliver strong results for the third quarter. Our operating model
enabled us to maximize our global footprint as we responded
effectively to shifting market conditions. At the same time, we
reached an important milestone in our strategic combination with
Viterra, achieving overwhelming shareholder support for the
transaction that we expect to accelerate Bunge’s growth.
“We are also making good progress on other growth initiatives
including enhancing our footprint, building relationships with our
customers – farmers and end consumers, and strengthening our
digital capabilities. I am proud of our team’s work across value
chains to successfully deliver on our mission of connecting farmers
to consumers to deliver essential food, feed and fuel to the
world.”
Three Months Ended
September 30,
Nine Months Ended
September 30,
(US$ in millions, except per share
data)
2023
2022
2023
2022
Net income attributable to
Bunge
$
373
$
380
$
1,627
$
1,274
Net income per common
share-diluted
$
2.47
$
2.49
$
10.71
$
8.30
Mark-to-market timing differences (a)
$
0.14
$
0.19
$
(1.29
)
$
1.04
Certain (gains) & charges (b)
$
0.38
$
0.77
$
0.55
$
1.32
Adjusted Net income per common
share-diluted (c)
$
2.99
$
3.45
$
9.97
$
10.66
Core Segment EBIT (c) (d)
$
711
$
628
$
2,674
$
1,959
Mark-to-market timing differences (a)
34
36
(261
)
193
Certain (gains) & charges (b)
(10
)
76
(29
)
156
Adjusted Core Segment EBIT (c)
$
735
$
740
$
2,384
$
2,308
Corporate and Other EBIT (c)
$
(182
)
$
(84
)
$
(417
)
$
(238
)
Certain (gains) & charges (b)
68
11
102
(18
)
Adjusted Corporate and Other EBIT
(c)
$
(114
)
$
(73
)
$
(315
)
$
(256
)
Non-core Segment EBIT (c) (e)
$
55
$
24
$
125
$
63
Certain (gains) & charges (b)
—
—
—
—
Adjusted Non-core Segment EBIT
(c)
$
55
$
24
$
125
$
63
Total Segment EBIT (c)
$
584
$
568
$
2,382
$
1,784
Mark-to-market timing differences (a)
34
36
(261
)
193
Certain (gains) & charges (b)
58
87
73
138
Adjusted Total Segment EBIT (c)
$
676
$
691
$
2,194
$
2,115
(a)
Mark-to-market timing impact of certain
commodity and freight contracts, readily marketable inventories,
and related hedges associated with committed future operating
capacity. See note 3 in the Additional Financial information
section of this release for details.
(b)
Certain (gains) & charges included in
Total Segment EBIT. See Additional Financial Information for
details.
(c)
Core Segment EBIT, Adjusted Core Segment
EBIT, Corporate and Other EBIT, Adjusted Corporate and Other EBIT,
Non-core Segment EBIT, Adjusted Non-core Segment EBIT, Total
Segment EBIT, Adjusted Total Segment EBIT, and Adjusted Net income
per common share-diluted are non-GAAP financial measures.
Reconciliations to the most directly comparable U.S. GAAP measures
are included in the tables attached to this press release and the
accompanying slide presentation posted on Bunge's website.
(d)
Core Segment earnings before interest and
tax ("Core Segment EBIT") comprises the aggregate earnings before
interest and tax (“EBIT”) of Bunge’s Agribusiness, Refined and
Specialty Oils and Milling reportable segments, and excludes
Bunge's Sugar & Bioenergy reportable segment and Corporate and
Other activities.
(e)
Non-core Segment EBIT comprises Bunge’s
Sugar & Bioenergy reportable segment EBIT, which reflects
Bunge's share of the results of its 50/50 joint venture with BP
p.l.c.
Core Segments
Agribusiness
Three Months Ended
Nine Months Ended
(US$ in millions, except per share
data)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Volumes (in thousand metric
tons)
18,854
19,622
55,497
59,182
Net Sales
$
10,082
$
11,741
$
31,809
$
35,719
Gross Profit
$
645
$
632
$
2,450
$
1,812
Selling, general and administrative
expense
$
(145
)
$
(135
)
$
(428
)
$
(375
)
Foreign exchange gains (losses)
$
(52
)
$
(35
)
$
(77
)
$
(119
)
EBIT attributable to noncontrolling
interests
$
(9
)
$
3
$
(29
)
$
(14
)
Other income (expense) - net
$
36
$
6
$
54
$
(71
)
Income (loss) from affiliates
$
(14
)
$
10
$
(19
)
$
41
Segment EBIT
$
461
$
481
$
1,951
$
1,274
Mark-to-market timing differences
21
26
(264
)
167
Certain (gains) & charges
(10
)
21
(29
)
101
Adjusted Segment EBIT
$
472
$
528
$
1,658
$
1,542
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
(9
)
$
21
$
(25
)
$
89
Certain (gains) & charges, Earnings
per share
$
(0.06
)
$
0.14
$
(0.17
)
$
0.59
Processing (2)
Three Months Ended
Nine Months Ended
(US$ in millions)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Processing EBIT
$
430
$
344
$
1,653
$
907
Mark-to-market timing differences
(2
)
55
(281
)
132
Certain (gains) & charges
(4
)
21
(18
)
73
Adjusted Processing EBIT
$
424
$
420
$
1,354
$
1,112
Higher results in Brazil soy origination, Asia and North America
were largely offset by lower results in Argentina. Results in
Europe were in line with last year as improved performance in
softseeds was offset by lower results in soy crush.
Merchandising (2)
Three Months Ended
Nine Months Ended
(US$ in millions)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Merchandising EBIT
$
31
$
137
$
298
$
367
Mark-to-market timing differences
23
(29
)
17
35
Certain (gains) & charges
(6
)
—
(11
)
28
Adjusted Merchandising EBIT
$
48
$
108
$
304
$
430
Higher results in our global corn value chain, which benefited
from the large Brazilian safrinha corn crop, was more than offset
by lower results in financial services and our global wheat value
chain.
Refined & Specialty Oils
Three Months Ended
Nine Months Ended
(US$ in millions, except per share
data)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Volumes (in thousand metric
tons)
2,278
2,316
6,636
6,941
Net Sales
$
3,601
$
4,302
$
11,090
$
12,723
Gross Profit
$
352
$
232
$
1,027
$
819
Selling, general and administrative
expense
$
(98
)
$
(86
)
$
(291
)
$
(262
)
Foreign exchange gains (losses)
$
(2
)
$
(6
)
$
8
$
(14
)
EBIT attributable to noncontrolling
interests
$
(6
)
$
(3
)
$
(17
)
$
(7
)
Other income (expense) - net
$
(19
)
$
(9
)
$
(50
)
$
(17
)
Segment EBIT
$
227
$
128
$
677
$
519
Mark-to-market timing differences
3
12
(6
)
15
Certain (gains) & charges
—
55
—
55
Adjusted Segment EBIT
$
230
$
195
$
671
$
589
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
—
$
55
$
—
$
55
Certain (gains) & charges, Earnings
per share
$
—
$
0.36
$
—
$
0.36
Refined & Specialty Oils Summary
Higher results in the quarter were primarily driven by North
America. Higher results in Asia also contributed to the improved
performance. Results in South America and Europe were lower.
Milling
Three Months Ended
Nine Months Ended
(US$ in millions, except per share
data)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Volumes (in thousand metric
tons)
890
1,234
2,555
3,537
Net Sales
$
479
$
631
$
1,484
$
1,911
Gross Profit
$
50
$
45
$
121
$
242
Selling, general and administrative
expense
$
(25
)
$
(26
)
$
(70
)
$
(78
)
Foreign exchange gains (losses)
$
—
$
—
$
(1
)
$
2
Other income (expense) - net
$
(2
)
$
1
$
(5
)
$
2
Segment EBIT
$
23
$
19
$
46
$
166
Mark-to-market timing differences
10
(2
)
9
11
Certain (gains) & charges
—
—
—
—
Adjusted Segment EBIT
$
33
$
17
$
55
$
177
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
—
$
—
$
—
$
—
Certain (gains) & charges, Earnings
per share
$
—
$
—
$
—
$
—
Milling Summary
Higher results in the quarter were primarily driven by our South
American operations reflecting improved margins due to the
combination of lower wheat costs and more favorable channel mix.
Results in the U.S. were also higher.
Corporate and Other
Three Months Ended
Nine Months Ended
(US$ in millions, except per share
data)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Gross Profit
$
(4
)
$
(23
)
$
(11
)
$
(15
)
Selling, general and administrative
expense
$
(178
)
$
(90
)
$
(430
)
$
(263
)
Foreign exchange gains (losses)
$
6
$
(11
)
$
5
$
(19
)
EBIT attributable to noncontrolling
interests
$
1
$
—
$
2
$
(11
)
Other income (expense) - net
$
(7
)
$
40
$
34
$
71
Income (loss) from affiliates
$
—
$
—
$
(17
)
$
(1
)
Segment EBIT
$
(182
)
$
(84
)
$
(417
)
$
(238
)
Certain (gains) & charges
68
11
102
(18
)
Adjusted Segment EBIT
$
(114
)
$
(73
)
$
(315
)
$
(256
)
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
67
$
41
$
109
$
59
Certain (gains) & charges, Earnings
per share
$
0.44
$
0.27
$
0.72
$
0.37
Corporate
Three Months Ended
Nine Months Ended
(US$ in millions)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Corporate EBIT
$
(155
)
$
(104
)
$
(381
)
$
(262
)
Certain (gains) & charges
48
11
66
(18
)
Adjusted Corporate EBIT
$
(107
)
$
(93
)
$
(315
)
$
(280
)
Other
Three Months Ended
Nine Months Ended
(US$ in millions)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Other EBIT
$
(27
)
$
20
$
(36
)
$
24
Certain (gains) & charges
20
—
36
—
Adjusted Other EBIT
$
(7
)
$
20
$
—
$
24
Corporate and Other Summary
The increase in Corporate expenses primarily reflected
investments in growth initiatives as well as performance related
compensation accruals. Lower Other results were primarily related
to Bunge Ventures and our captive insurance program.
Non-core Segments
Sugar & Bioenergy
Three Months Ended
Nine Months Ended
(US$ in millions, except per share
data)
Sep 30, 2023
Sep 30, 2022
Sep 30, 2023
Sep 30, 2022
Net Sales
$
56
$
74
$
192
$
195
Gross Profit
$
2
$
2
$
4
$
6
Income (loss) from affiliates
$
53
$
20
$
119
$
56
Segment EBIT
$
55
$
24
$
125
$
63
Certain (gains) & charges
—
—
—
—
Adjusted Segment EBIT
$
55
$
24
$
125
$
63
Certain (gains) & charges, Net income
(loss) attributable to Bunge
$
—
$
—
$
—
$
—
Certain (gains) & charges, Earnings
per share
$
—
$
—
$
—
$
—
Sugar & Bioenergy Summary
Improved results were primarily driven by higher sugar prices,
which more than offset lower ethanol prices.
Cash Flow
Nine Months Ended
Sep 30, 2023
Sep 30, 2022
Cash provided by (used for) operating
activities
$
1,860
$
(5,031
)
Proceeds from beneficial interest in
securitized trade receivables (a)
85
5,176
Cash provided by (used for) operating
activities, adjusted
$
1,945
$
145
Certain reconciling items to Adjusted
funds from operations (4)
(10
)
1,643
Adjusted funds from operations (4)
$
1,935
$
1,788
(a)
On November 16, 2022, Bunge and certain of
its subsidiaries amended its trade receivables securitization
program from a deferred purchase price ("DPP") structure to a
pledge structure. Prior to November 16, 2022, Bunge received a
portion of its consideration in the form of beneficial interests in
securitized trade receivables. Cash collections of the beneficial
interests were classified as investing activities in the
consolidated statements of cash flows. Subsequent to November 16,
2022, all consideration is received in cash and classified as an
operating activity in the consolidated statements of cash flows,
except for transition-related collections of repurchased
receivables which are reported as investing activity in Proceeds
from beneficial interest in securitized trade receivables in the
consolidated statements of cash flows.
Cash provided by operations in the nine months ended September
30, 2023, was $1,860 million compared to cash used of $5,031
million in the same period last year. Adjusted for the proceeds
from beneficial interest in securitized trade receivables, cash
provided by operating activities was $1,945 million compared to
$145 million in the prior year. The higher cash provided by
operating activities, adjusted, was primarily driven by net changes
in working capital and higher reported net income. Adjusted funds
from operations (FFO) was $1,935 million compared to $1,788 million
in the prior year.(4)
Income Taxes
For the nine months ended September 30, 2023, income tax expense
was $495 million compared to $257 million in the prior year. The
increase was primarily due to higher pre-tax income in 2023 as well
as a change in geographic earnings mix.
Taking into account year-to-date results and the current margin
environment and forward curves, we now expect full-year 2023
adjusted EPS of at least $12.50 with potential upside depending on
how market conditions evolve over the balance of the year.
In Agribusiness, full-year results are expected to be up from
our prior outlook and in line with last year driven by higher
results in Processing.
In Refined and Specialty Oils, full-year results are expected to
be up from our prior outlook and last year's record
performance.
In Milling, full-year results are expected to be in line with
our prior outlook and significantly down from a strong prior
year.
In Corporate and Other, results are expected to be down from our
prior forecast and last year.
In Non-Core, full-year results in our sugar and bioenergy joint
venture are expected to be up from our prior outlook and higher
than last year.
Additionally, the Company expects the following for 2023: an
adjusted annual effective tax rate in the range of 21% to 23%; net
interest expense in the range of $340 to $360 million, which is
down from our prior outlook of $350 to $370 million; capital
expenditures in the range of $1.0 to $1.2 billion; and depreciation
and amortization of approximately $425 million, which is up $10
million from our prior outlook.
- Conference Call and Webcast Details
Bunge Limited’s management will host a conference call at 8:00
a.m. Eastern (7:00 a.m. Central) on Thursday, October 26, 2023 to
discuss the Company’s results.
Additionally, a slide presentation to accompany the discussion
of results will be posted on www.bunge.com.
To access the webcast, go to “Events & Presentations” under
“News & Events” in the “Investor Center” section of the
company’s website. Select “Q3 2023 Bunge Limited Conference Call”
and follow the prompts. Please go to the website at least 15
minutes prior to the call to register and download any necessary
audio software.
To listen to the call, please dial 1-844-735-3666. If you are
located outside the United States or Canada, dial 1-412-317-5706.
Please dial in five to 10 minutes before the scheduled start time.
The call will also be webcast live at www.bunge.com.
A replay of the call will be available later in the day on
October 26, 2023, continuing through November 26, 2023. To listen
to it, please dial 1-877-344-7529 in the United States,
1-855-669-9658 in Canada, or 1-412-317-0088 in other locations.
When prompted, enter confirmation code 8946006.
At Bunge (NYSE: BG), our purpose is to connect farmers to
consumers to deliver essential food, feed and fuel to the world.
With more than two centuries of experience, unmatched global scale
and deeply rooted relationships, we work to strengthen global food
security, increase sustainability where we operate, and help
communities prosper. As the world’s leader in oilseed processing
and a leading producer and supplier of specialty plant-based oils
and fats, we value our partnerships with farmers to bring quality
products from where they’re grown to where they’re consumed. At the
same time, we collaborate with our customers to develop tailored
and innovative solutions to meet evolving dietary needs and trends
in every part of the world. Our Company is headquartered in St.
Louis, Missouri, and we have almost 23,000 dedicated employees
working across approximately 300 facilities located in more than 40
countries.
We routinely post important information for investors on our
website, www.bunge.com, in the "Investors" section. We may use this
website as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD. Accordingly, investors should monitor the Investors section of
our website, in addition to following our press releases, U.S.
Securities and Exchange Commission ("SEC") filings, public
conference calls, presentations and webcasts. The information
contained on, or that may be accessed through, our website is not
incorporated by reference into, and is not a part of, this
document.
- Cautionary Statement Concerning Forward-Looking
Statements
This press release contains both historical and forward-looking
statements. All statements, other than statements of historical
fact are, or may be deemed to be, forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (Exchange Act). These forward-looking statements are not
based on historical facts, but rather reflect our current
expectations and projections about our future results, performance,
prospects and opportunities. We have tried to identify these
forward-looking statements by using words including “may,” “will,”
“should,” “could,” “expect,” “anticipate,” “believe,” “plan,”
“intend,” “estimate,” “continue” and similar expressions. These
forward-looking statements are subject to a number of risks,
uncertainties, assumptions and other factors that could cause our
actual results, performance, prospects or opportunities to differ
materially from those expressed in, or implied by, these
forward-looking statements. The following important factors, among
others, could cause actual results to differ from these
forward-looking statements: the impact on our employees,
operations, and facilities from the war in Ukraine and the
resulting economic and other sanctions imposed on Russia, including
the impact on Bunge resulting from the continuation and/or
escalation of the war and sanctions against Russia; the effects of
weather conditions and the impact of crop and animal disease on our
business; the impact of global and regional economic, agricultural,
financial and commodities market, political, social and health
conditions; changes in government policies and laws affecting our
business, including agricultural and trade policies, financial
markets regulation and environmental, tax and biofuels regulation;
the impact of seasonality; the impact of government policies and
regulations; the outcome of pending regulatory and legal
proceedings; our ability to complete, integrate and benefit from
acquisitions, divestitures, joint ventures and strategic alliances,
including without limitation Bunge's proposed business combination
with Viterra Limited, and the Company's ability to consummate the
proposed redomestication that would change the Company's place of
incorporation and residence from Bermuda to Switzerland; the impact
of industry conditions, including fluctuations in supply, demand
and prices for agricultural commodities and other raw materials and
products that we sell and use in our business, fluctuations in
energy and freight costs and competitive developments in our
industries; the effectiveness of our capital allocation plans,
funding needs and financing sources; the effectiveness of our risk
management strategies; operational risks, including industrial
accidents, natural disasters, pandemics or epidemics and
cybersecurity incidents; changes in foreign exchange policy or
rates; the impact of our dependence on third parties; our ability
to attract and retain executive management and key personnel; and
other factors affecting our business generally. The forward-looking
statements included in this release are made only as of the date of
this release, and except as otherwise required by federal
securities law, we do not have any obligation to publicly update or
revise any forward-looking statements to reflect subsequent events
or circumstances.
You should refer to “Item 1A. Risk Factors” in our Annual Report
on Form 10-K for the year ended December 31, 2022, filed with the
SEC on February 24, 2023, “Risks Related to the Acquisition” and
“Risks Related to the Redomestication” sections of the Company's
definitive proxy statement filed with the SEC on August 7,
2023.
- Additional Financial Information
Certain gains and (charges), quarter-to-date
The following table provides a summary of certain gains and
(charges) that may be of interest to investors, including a
description of these items and their effect on Net income (loss)
attributable to Bunge, Earnings per share diluted and Segment EBIT
for the three month periods ended September 30, 2023 and 2022.
(US$ in millions, except per share
data)
Net Income (Loss)
Attributable to Bunge
Earnings Per Share
Diluted
Segment EBIT
Three Months Ended September
30,
2023
2022
2023
2022
2023
2022
Core Segments:
$
9
$
(76
)
$
0.06
$
(0.50
)
$
10
$
(76
)
Agribusiness
$
9
$
(21
)
$
0.06
$
(0.14
)
$
10
$
(21
)
Ukraine-Russia War
9
—
0.06
—
10
—
Impairment on sale of a business
—
(21
)
—
(0.14
)
—
(21
)
Refined and Specialty Oils
$
—
$
(55
)
$
—
$
(0.36
)
$
—
$
(55
)
Impairment on sale of a business
—
(55
)
—
(0.36
)
—
(55
)
Milling
$
—
$
—
$
—
$
—
$
—
$
—
Corporate and Other:
$
(67
)
$
(41
)
$
(0.44
)
$
(0.27
)
$
(68
)
$
(11
)
Acquisition and integration costs
(47
)
—
(0.31
)
—
(48
)
—
Impairment of equity method and other
investments
(20
)
—
(0.13
)
—
(20
)
—
Impairment on sale of a business
—
(11
)
—
(0.07
)
—
(11
)
Tax on Mexico wheat milling
disposition
—
(30
)
$
—
(0.20
)
—
—
Non-core Segment:
$
—
$
—
$
—
$
—
$
—
$
—
Sugar & Bioenergy
$
—
$
—
$
—
$
—
$
—
$
—
Total
$
(58
)
$
(117
)
$
(0.38
)
$
(0.77
)
$
(58
)
$
(87
)
See Definition and Reconciliation of
Non-GAAP Measures.
Core Segments
Agribusiness
EBIT for the three months ended September 30, 2023 included a
mark-to-market gain of $10 million, in Cost of goods sold, related
to inventory recovered from our Mykolaiv and other facilities in
Ukraine. The circumstances allowing for recovery of these
inventories did not exist and were unforeseeable when the inventory
reserves were initially recorded in 2022 in conjunction with the
Ukraine-Russia war.
EBIT for the three months ended September 30, 2022 included $21
million of impairment charges on the classification of our Russian
oilseed and processing business as held-for-sale, recorded in Cost
of goods sold.
Refined and Specialty Oils
EBIT for the three months ended September 30, 2022 included $55
million of impairment charges and employee severance expenses on
the classification of our Russian oilseed and processing business
as held-for-sale, recorded in Cost of goods sold.
Corporate and Other
Net income for the three months ended September 30, 2023
included $47 million of acquisition and integration costs (net of
$2 million in tax benefits) related to the announced business
combination agreement with Viterra. Specifically, the Company
recorded $1 million of pre-tax charges within Interest expense for
financing related fees, and $48 million of pre-tax charges within
SG&A for other acquisition and integration related costs.
EBIT for the three months ended September 30, 2023 included a
$20 million impairment charge, in Other Income (expense) - net,
related to the full impairment of a long-term investment held in
Other non-current assets.
EBIT for the three months ended September 30, 2022 included $11
million of impairment charges on the classification of our Russian
oilseed and processing business as held-for-sale, recorded in Cost
of goods sold.
Net income for the three months ended September 30, 2022
included $30 million tax expense on sale of our Mexico Wheat
Milling business.
Certain gains and (charges), year-to-date
The following table provides a summary of certain gains and
(charges) that may be of interest to investors, including a
description of these items and their effect on Net income (loss)
attributable to Bunge, Earnings per share diluted and Segment EBIT
for the nine month periods ended September 30, 2023 and 2022.
(US$ in millions, except per share
data)
Net Income (Loss)
Attributable to
Bunge
Earnings
Per Share
Diluted
Segment
EBIT
Nine months ended September 30,
2023
2022
2023
2022
2023
2022
Core Segments:
$
25
$
(144
)
$
0.17
$
(0.95
)
$
29
$
(156
)
Agribusiness
$
25
$
(89
)
$
0.17
$
(0.59
)
$
29
$
(101
)
Ukraine-Russia War
25
(68
)
0.17
(0.45
)
29
(80
)
Impairment on sale of a business
—
(21
)
—
(0.14
)
—
(21
)
Refined and Specialty Oils
$
—
$
(55
)
$
—
$
(0.36
)
$
—
$
(55
)
Impairment on sale of a business
—
(55
)
—
(0.36
)
—
(55
)
Milling
$
—
$
—
$
—
$
—
$
—
$
—
Corporate and Other:
$
(109
)
$
(59
)
$
(0.72
)
$
(0.37
)
$
(102
)
$
18
Acquisition and integration costs
(73
)
—
(0.48
)
—
(66
)
—
Impairment of equity method and other
investments
(36
)
—
(0.24
)
—
(36
)
—
Pension settlement
—
21
—
0.14
—
29
Bond early redemption
—
(39
)
—
(0.25
)
—
—
Impairment on sale of a business
—
(11
)
—
(0.07
)
—
(11
)
Tax on Mexico wheat milling
disposition
—
(30
)
—
(0.19
)
—
—
Non-core Segment:
$
—
$
—
$
—
$
—
$
—
$
—
Sugar & Bioenergy
$
—
$
—
$
—
$
—
$
—
$
—
Total
$
(84
)
$
(203
)
$
(0.55
)
$
(1.32
)
$
(73
)
$
(138
)
Core Segments
Agribusiness
EBIT for the nine months ended September 30, 2023 included a
mark-to-market gain of $29 million, in Cost of goods sold, related
to inventory recovered from our Mykolaiv and other facilities in
Ukraine. The circumstances allowing for recovery of these
inventories did not exist and were unforeseeable when the inventory
reserves were initially recorded in 2022 in conjunction with the
Ukraine-Russia war.
EBIT for the nine months ended September 30, 2022 included $80
million of charges, recorded in Cost of goods sold, resulting from
the Ukraine-Russia war, primarily related to losses associated with
inventories physically located in occupied territories in Ukraine,
or in difficult to access locations with high costs of
recovery.
EBIT for the nine months ended September 30, 2022 included $21
million of impairment charges on the classification of our Russian
oilseed and processing business as held-for-sale, recorded in Cost
of goods sold.
Refined and Specialty Oils
EBIT for the nine months ended September 30, 2022 included $55
million of impairment charges and employee severance expenses on
the classification of our Russian oilseed and processing business
as held-for-sale, recorded in Cost of goods sold.
Corporate and Other
Net income for the nine months ended September 30, 2023 included
$73 million of acquisition and integration costs (net of $5 million
in tax benefits) related to the announced business combination
agreement with Viterra. Specifically, the Company recorded $12
million of pre-tax charges within Interest expense for financing
related fees, and $66 million of pre-tax charges within SG&A
for other acquisition and integration related costs.
EBIT for the nine months ended September 30, 2023 included a $20
million impairment charge, in Other Income (expense) - net, related
to the full impairment of a long-term investment held in Other
non-current assets.
EBIT for the nine months ended September 30, 2023 included a $16
million impairment charge, in Income (loss) from affiliates,
related to a minority investment in Australian Plant Proteins, a
start-up manufacturer of novel protein ingredients.
EBIT for the nine months ended September 30, 2022 included a $29
million gain, at Bunge's then 70% share, related to the settlement
of one of the Company’s international defined benefit pension
plans, recorded in Other income (expense) - net.
Net income for the nine months ended September 30, 2022 also
included $39 million of expense (net of $8 million in tax benefits)
related to the early redemption of the Company's 4.350% unsecured
senior notes due March 15, 2024. In connection with the early
redemption, the Company recorded a $47 million pre-tax charge
within Interest expense, comprising a $31 million "make-whole"
payment and a $16 million loss on the termination and
de-designation of related interest rate hedges.
EBIT for the nine months ended September 30, 2022 included $11
million of impairment charges on the classification of our Russian
oilseed and processing business as held-for-sale, recorded in Cost
of goods sold.
Net income for the nine months ended September 30, 2022 included
$30 million tax expense on sale of the Mexico Wheat Milling
business.
- Consolidated Earnings Data (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(US$ in millions, except per share
data)
2023
2022
2023
2022
Net sales
$
14,227
$
16,759
$
44,604
$
50,572
Cost of goods sold
(13,182
)
(15,871
)
(41,013
)
(47,708
)
Gross profit
1,045
888
3,591
2,864
Selling, general and administrative
expenses
(447
)
(337
)
(1,220
)
(979
)
Foreign exchange (losses) gains
(47
)
(52
)
(64
)
(150
)
Other income (expense) – net
8
40
35
(13
)
Income (loss) from affiliates
39
30
83
95
EBIT attributable to noncontrolling
interest (a) (1)
(14
)
(1
)
(43
)
(33
)
Total Segment EBIT
584
568
2,382
1,784
Interest income
38
30
121
50
Interest expense
(133
)
(103
)
(374
)
(306
)
Income tax (expense) benefit
(114
)
(113
)
(495
)
(257
)
Noncontrolling interest share of interest
and tax (a) (1)
(2
)
(2
)
(7
)
3
Net income (loss) attributable to Bunge
(1)
$
373
$
380
$
1,627
$
1,274
Net income (loss) attributable to Bunge
common shareholders - diluted
$
2.47
$
2.49
$
10.71
$
8.30
Weighted–average common shares
outstanding - diluted
151
152
152
154
(a) The line items "EBIT attributable to
noncontrolling interest" and "Noncontrolling interest share of
interest and tax" when combined, represent consolidated Net
(income) loss attributable to noncontrolling interests on a U.S.
GAAP basis of presentation.
- Condensed Consolidated Balance Sheets (Unaudited)
September 30,
December 31,
(US$ in millions)
2023
2022
Assets
Cash and cash equivalents
$
2,173
$
1,104
Trade accounts receivable, net
2,509
2,829
Inventories (a)
7,548
8,408
Assets held for sale
1
36
Other current assets
4,393
4,381
Total current assets
16,624
16,758
Property, plant and equipment, net
4,283
3,617
Operating lease assets
864
1,024
Goodwill and other intangible assets,
net
889
830
Investments in affiliates
1,201
1,012
Other non-current assets
1,272
1,339
Total assets
$
25,133
$
24,580
Liabilities and Equity
Short-term debt
$
914
$
546
Current portion of long-term debt
301
846
Trade accounts payable
3,975
4,386
Current operating lease obligations
317
425
Liabilities held for sale
—
18
Other current liabilities
2,738
3,379
Total current liabilities
8,245
9,600
Long-term debt
3,967
3,259
Non-current operating lease
obligations
495
547
Other non-current liabilities
1,280
1,214
Total liabilities
13,987
14,620
Redeemable noncontrolling
interest
3
4
Total equity
11,143
9,956
Total liabilities, redeemable
noncontrolling interest and equity
$
25,133
$
24,580
(a) Includes readily marketable
inventories of $6,172 million and $6,654 million at September 30,
2023 and December 31, 2022, respectively. Assets held for sale
includes RMI of zero and $26 million at September 30, 2023 and
December 31, 2022, respectively. Of the total RMI, $4,794 million
and $4,789 million can be attributable to merchandising activities
at September 30, 2023 and December 31, 2022, respectively.
- Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(US$ in millions)
2023
2022
Operating Activities
Net income (loss) (1)
$
1,677
$
1,304
Adjustments to reconcile net income (loss)
to cash provided by (used for) operating activities:
Impairment charges
56
86
Foreign exchange (gain) loss on net
debt
(151
)
(96
)
Depreciation, depletion and
amortization
317
305
Deferred income tax expense (benefit)
115
(92
)
Results from affiliates
(100
)
(95
)
Other, net
116
150
Changes in operating assets and
liabilities, excluding the effects of acquisitions:
Trade accounts receivable
306
(359
)
Inventories
933
(229
)
Secured advances to suppliers
(228
)
26
Trade accounts payable and accrued
liabilities
(690
)
259
Advances on sales
(227
)
(81
)
Net unrealized (gain) loss on derivative
contracts
(247
)
(456
)
Margin deposits
(111
)
(55
)
Recoverable and income taxes, net
(19
)
(201
)
Marketable securities
(17
)
341
Beneficial interest in securitized trade
receivables (a)
—
(5,288
)
Other, net
130
(550
)
Cash provided by (used for) operating
activities
1,860
(5,031
)
Investing Activities
Payments made for capital expenditures
(805
)
(353
)
Proceeds from investments
21
217
Payments for investments
(26
)
(225
)
Settlement of net investment hedges
(57
)
(153
)
Proceeds from beneficial interest in
securitized trade receivables (a)
85
5,176
Proceeds from sales of businesses and
property, plant and equipment
165
496
Payments for investments in affiliates
(136
)
(55
)
Other, net
107
10
Cash provided by (used for) investing
activities
(646
)
5,113
Financing Activities
Net borrowings (repayments) of short-term
debt
416
834
Net proceeds (repayments) of long-term
debt
96
(981
)
Proceeds from the exercise of options for
common shares
7
30
Repurchases of common shares
(466
)
(200
)
Dividends paid to common and preference
shareholders
(287
)
(256
)
Contributions from (Return of capital to)
noncontrolling interest
40
—
Sale of noncontrolling interest
—
521
Acquisition of redeemable noncontrolling
interest and noncontrolling interest
—
(102
)
Other, net
(19
)
52
Cash provided by (used for) financing
activities
(213
)
(102
)
Effect of exchange rate changes on cash
and cash equivalents, restricted cash, and cash held for
sale
40
112
Net increase (decrease) in cash and
cash equivalents, restricted cash, and cash held for sale
1,041
92
Cash and cash equivalents, restricted
cash, and cash held for sale - beginning of period
1,152
905
Cash and cash equivalents, restricted
cash, and cash held for sale - end of period
$
2,193
$
997
(a) See Quarter Results, Cash Flow Section
for details regarding changes to the trade receivables
securitization program.
- Definition and Reconciliation of Non-GAAP Measures
This earnings release contains certain "non-GAAP financial
measures" as defined in Regulation G of the Securities Exchange Act
of 1934. Bunge has reconciled these non-GAAP financial measures to
the most directly comparable U.S. GAAP measures below. These
measures may not be comparable to similarly titled measures used by
other companies.
Total Segment EBIT and Adjusted Total Segment EBIT
Bunge uses segment earnings before interest and tax (“Segment
EBIT”) to evaluate the operating performance of its individual
segments. Segment EBIT excludes EBIT attributable to noncontrolling
interests. Bunge also uses Core Segment EBIT, Non-Core Segment
EBIT, Corporate and Other EBIT and Total Segment EBIT to evaluate
the operating performance of Bunge’s Core reportable segments,
Non-Core reportable segments and Total reportable segments together
with Corporate and Other. Core Segment EBIT is the aggregate of the
earnings before interest and taxes of each of Bunge’s Agribusiness,
Refined and Specialty Oils, and Milling segments. Non-Core Segment
EBIT is the earnings before interest and taxes of Bunge’s Sugar
& Bioenergy segment. Total Segment EBIT is the aggregate of the
earnings before interest and taxes of Bunge’s Core and Non-Core
reportable segments, together with its Corporate and Other
activities.
Adjusted Core Segment EBIT, Adjusted Non-Core Segment EBIT,
Adjusted Corporate and Other EBIT and Adjusted Total Segment EBIT,
are calculated by excluding temporary mark-to-market timing
differences, as defined in note 3 below, and certain gains and
(charges), as described in "Additional Financial Information"
above, from Core Segment EBIT, Non-Core Segment EBIT, Corporate and
Other EBIT, and Total Segment EBIT, respectively.
Core Segment EBIT, Non-Core Segment EBIT, Corporate and Other
EBIT, Total Segment EBIT, Adjusted Core Segment EBIT, Adjusted
Non-core Segment EBIT, Adjusted Corporate and Other EBIT and
Adjusted Total Segment EBIT are non-GAAP financial measures and are
not intended to replace Net income (loss) attributable to Bunge,
the most directly comparable U.S. GAAP financial measure. Bunge's
management believes these non-GAAP measures are a useful measure of
its reportable segments' operating profitability, since the
measures allow for an evaluation of segment performance without
regard to their financing methods or capital structure. For this
reason, operating performance measures such as these non-GAAP
measures are widely used by analysts and investors in Bunge's
industries. These non-GAAP measures are not a measure of
consolidated operating results under U.S. GAAP and should not be
considered as an alternative to Net income (loss) or any other
measure of consolidated operating results under U.S. GAAP.
Net Income (loss) attributable to Bunge to Adjusted Net
Income (loss) attributable to Bunge
Adjusted Net Income (loss) excludes temporary mark-to-market
timing differences, as defined in note 3 below, and certain gains
and (charges), as described in "Additional Financial Information"
above, and is a non-GAAP financial measure. This measure is not a
measure of Net income (loss) attributable to Bunge, the most
directly comparable U.S. GAAP financial measure. It should not be
considered as an alternative to Net Income (loss) attributable to
Bunge, Net Income (loss), or any other measure of consolidated
operating results under U.S. GAAP. Adjusted Net income (loss) is a
useful measure of the Company's profitability.
We also have presented projected Adjusted Net income per common
share for 2023. This information is provided only on a non-GAAP
basis without reconciliation to projected Net Income per common
share for 2023, the mostly directly comparable U.S. GAAP measure.
The most directly comparable GAAP measure has not been provided due
to the inability to quantify certain amounts necessary for such
reconciliation, including but not limited to potentially
significant future market price movements over the remainder of the
year.
Below is a reconciliation of Net income attributable to Bunge,
to Total Segment EBIT, and Adjusted Total Segment EBIT:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(US$ in millions)
2023
2022
2023
2022
Net income (loss) attributable to
Bunge
$
373
$
380
$
1,627
$
1,274
Interest income
(38
)
(30
)
(121
)
(50
)
Interest expense
133
103
374
306
Income tax expense (benefit)
114
113
495
257
Noncontrolling interest share of interest
and tax
2
2
7
(3
)
Total Segment EBIT
$
584
$
568
$
2,382
$
1,784
Agribusiness EBIT
$
461
$
481
$
1,951
$
1,274
Refined and Specialty Oils EBIT
227
128
677
$
519
Milling EBIT
23
19
46
$
166
Core Segment EBIT
$
711
$
628
$
2,674
$
1,959
Corporate and Other EBIT
$
(182
)
$
(84
)
$
(417
)
$
(238
)
Sugar & Bioenergy EBIT
$
55
$
24
$
125
$
63
Non-Core Segment EBIT
$
55
$
24
$
125
$
63
Total Segment EBIT
$
584
$
568
$
2,382
$
1,784
Mark-to-market timing difference
34
36
(261
)
193
Certain (gains) & charges
58
87
73
138
Adjusted Total Segment EBIT
$
676
$
691
$
2,194
$
2,115
Below is a reconciliation of Net income (loss) attributable to
Bunge, to Adjusted Net income (loss) attributable to Bunge:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(US$ in millions, except per share
data)
2023
2022
2023
2022
Net income (loss) attributable to
Bunge
$
373
$
380
$
1,627
$
1,274
Mark-to-market timing difference
21
29
(196
)
160
Certain (gains) and charges:
Acquisition and integration costs
47
—
73
—
Impairment of equity method and other
investments
20
—
36
—
Ukraine-Russia war
(9
)
—
(25
)
68
Bond early redemption
—
—
—
39
Impairment on sale of a business
—
87
—
87
Pension settlement
—
—
—
(21
)
Tax on Mexico wheat milling
disposition
—
30
—
30
Adjusted Net income (loss) attributable
to Bunge
$
452
$
526
$
1,515
$
1,637
Weighted-average common shares outstanding
- diluted, adjusted (a)
151
152
152
154
Adjusted Net income (loss) per common
share - diluted
$
2.99
$
3.45
$
9.97
$
10.66
(a) There were less than 1 million
anti-dilutive outstanding stock options or contingently issuable
restricted stock units excluded in the weighted-average number of
common shares outstanding for each of the three and nine month
periods ended September 30, 2023 and 2022.
Adjusted Funds From Operations and Cash provided by (used
for) operating activities, adjusted
Adjusted FFO is calculated by excluding from Cash provided by
(used for) operating activities, foreign exchange gain (loss) on
net debt, payments for beneficial interests in securitized trade
receivables, working capital changes, net (income) loss
attributable to noncontrolling interests and redeemable
noncontrolling interests, and mark-to-market timing differences
after tax. Adjusted FFO is a non-GAAP financial measure and is not
intended to replace Cash provided by (used for) operating
activities, the most directly comparable U.S. GAAP financial
measure. Bunge management believes presentation of this measure
allows investors to view its cash generating performance using the
same measure that management uses in evaluating financial and
business performance and trends without regard to foreign exchange
gains and losses, working capital changes and mark-to-market timing
differences. This non-GAAP measure is not a measure of consolidated
cash flow under U.S. GAAP and should not be considered as an
alternative to Cash provided by (used for) operating activities,
Net increase (decrease) in cash and cash equivalents, restricted
cash, and cash held for sale, or any other measure of consolidated
cash flow under U.S. GAAP.
Cash provided by (used for) operating activities, adjusted is
calculated by including the Proceeds from beneficial interests in
securitized trade receivables with Cash provided by (used for)
operating activities. Cash provided by (used for) operating
activities, adjusted is a non-GAAP financial measure and is not
intended to replace Cash provided by (used for) operating
activities, the most directly comparable U.S. GAAP financial
measure. Our management believes presentation of this measure
allows investors to view our cash generating performance using the
same measure that management uses in evaluating financial and
business performance and trends.
(1)
A reconciliation of Net income (loss)
attributable to Bunge, to Net income (loss) is as follows:
Three months ended September
30,
Nine months ended September
30,
(US$ in millions)
2023
2022
2023
2022
Net income (loss) attributable to
Bunge
$
373
$
380
$
1,627
$
1,274
EBIT attributable to noncontrolling
interest
14
1
43
33
Noncontrolling interest share of interest
and tax
2
2
7
(3
)
Net income (loss)
$
389
$
383
$
1,677
$
1,304
(2)
The Processing business included in our
Agribusiness segment consists of: global oilseed processing
activities, which principally include the origination and crushing
of oilseeds (including soybeans, canola, rapeseed and sunflower
seed) into protein meals and vegetable oils; the distribution of
oilseeds, oilseed products and fertilizer products through our port
terminals and transportation assets (including trucks, railcars,
barges and ocean vessels); fertilizer production; and biodiesel
production, which is partially conducted through joint
ventures.
The Merchandising business included in our
Agribusiness segment primarily consists of: global grain
origination activities, which principally include the purchasing,
cleaning, drying, storing and handling of corn, wheat and barley at
our network of grain elevators; global trading and distribution of
grains and oils; logistical services for the distribution of these
commodities to our customer markets through our port terminals and
transportation assets (including trucks, railcars, barges and ocean
vessels); and financial services activities for customers from whom
we purchase commodities, and other third parties.
(3)
Mark-to-market timing difference comprises
the estimated net temporary impact resulting from unrealized
period-end gains/losses associated with the fair valuation of
certain forward contracts, readily marketable inventories (RMI),
and related futures contracts associated with our committed future
operating capacity. The impact of these mark-to-market timing
differences, which is expected to reverse over time due to the
forward contracts, RMI, and related futures contracts being part of
an economically-hedged position, is not representative of the
operating performance of our business.
(4)
A reconciliation of Cash provided by (used
for) operating activities to Adjusted funds from operations (FFO)
is as follows:
Nine months ended September
30,
(US$ in millions)
2023
2022
Cash provided by (used for) operating
activities
$
1,860
$
(5,031
)
Foreign exchange gain (loss) on net
debt
151
96
Beneficial interest in securitized trade
receivables
—
5,288
Working capital changes
170
1,305
Net (income) loss attributable to
noncontrolling interests and redeemable noncontrolling
interests
(50
)
(30
)
Mark-to-Market timing difference, after
tax
(196
)
160
Adjusted FFO
$
1,935
$
1,788
(5)
We have not presented a comparable U.S.
GAAP financial measure for any full-year 2023 outlook financial
measures presented on an adjusted, non-GAAP basis because the
information necessary for such presentation is unavailable at this
time. The information necessary to prepare the comparable U.S. GAAP
presentation could result in significant differences from the
non-GAAP financial measures presented in this release. Please see
“Definition and Reconciliation of Non-GAAP Measures” for more
information.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231026324795/en/
Investor Contact: Ruth Ann Wisener Bunge Limited
636-292-3014 ruthann.wisener@bunge.com
Media Contact: Bunge News Bureau Bunge Limited
636-292-3022 news@bunge.com
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