Bunge transformation continues; earnings climb 39%

Bunge transformation continues; earnings climb 39%

ST. LOUIS — Fiscal 2023 was a year of progress on Bunge Global SA’s long-term strategy, highlighted by shareholder approval for its pending combination with Viterra; announcement of a pending acquisition of CJ Selecta, a Brazilian-based manufacturer and exporter of soy-based products; and ground-breaking ceremonies at the company’s new soy protein concentrate plant in Morristown, Ind. The company also completed the acquisition of an oil refinery in Avondale, La.

The moves set the stage for continued growth in an environment where “the only constant is change,” said Gregory A. Heckman, chief executive officer.

“Each year brings its own set of challenges and opportunities, and the team has shown we can navigate with agility and speed,” Heckman said during a Feb. 7 conference call with securities analysts.

Bunge net income in the year ended Dec. 31, 2023, was $2.24 billion, equal to $14.87 per share on the common stock, up 39% from $1.61 billion, or $10.51 per share, in fiscal 2022. Adjusted total segment EBIT increased to $3.03 billion from $2.86 billion. On an adjusted basis, earnings per share were $13.66 in 2023, down from $13.91 in 2022.

Sales in 2023 were $59.54 billion, down 11% from $67.23 billion.

“Our team continued to execute on planned capital projects, which when combined with our focus on operational excellence, enabled us to reduce oilseed processing unplanned downtime to a historic low, making better use of our capacity directly hits the bottom line,” Heckman said. “These investments were also made with an eye toward advancing our work in sustainability. Running our plants more efficiently improves our performance against our science-based targets, and we’re committed to continuous improvement of our operations while expanding regenerative agricultural programs and engaging with the industry to do our part to reduce carbon emissions across the entire supply chain.”

Adjusted segment EBIT within the Agribusiness unit totaled $2.3 billion in 2023, up 7.6% from $2.13 billion in 2022. Fiscal 2023 results included a $37 million fixed asset impairment charge in North America recorded in cost of goods sold as well as a mark-to-market gain of $29 million related to inventory recovered from the company’s Mykolaiv facility and other facilities in Ukraine. Fiscal 2022 results included $80 million of charges resulting from the Ukraine-Russia war as well as $40 million related to the sale of the company’s Russian oilseed processing business. Net sales in the division decreased 10% to $42.76 billion from $47.7 billion while volumes slipped to 76,019,000 tonnes from 77,492,000 tonnes.

In the Refined and Specialty Oils unit, adjusted segment EBIT totaled $883 million, up 8.9% from $811 million in fiscal 2022. Fiscal 2023 results included accelerated amortization charges of $17 million in SG&A, primarily related to the discontinuance of the Loders Croklaan trademark. Fiscal 2022 results included $55 million in impairment charges and employee severance expenses on the classification of Bunge’s Russian oilseed processing business. Net sales in the division decreased 13% to $14.6 billion from $16.85 billion. Volumes also were lower, falling to 8,908,000 tonnes from 9,201,000 tonnes.

Adjusted segment EBIT within the Milling unit was $85 million, down 49% from $167 million in fiscal 2022. Net sales in the division decreased 21%, falling to $1.9 billion from $2.39 billion. Volumes fell to 3,391,000 tonnes from 4,331,000 tonnes.

In the fourth quarter of 2023, Bunge net income was $616 million, or $4.18 per share, up 83% from $336 million, or $2.21 per share, the year before. Sales were $14.94 billion, down from $16.66 billion, in the final quarter of 2022. Adjusted earnings per share were $3.70, up from $3.24.

Looking ahead, John W. Neppl, executive vice president and chief financial officer, expects another year of unexpected challenges and opportunities.

“In Agribusiness, full-year results were forecasted to be down from last year’s record performance, primarily due to lower results in processing where margins have compressed in most regions,” he said. “Results in merchandising are forecasted to be down slightly from last year.

“In Refined and Specialty Oils, full-year results are expected to be down from the record prior year, reflecting an environment of increased supply, particularly in the US. In Milling, full-year results are expected to be up from last year, and in Corporate and Other full-year results were also expected to be up from last year.

“In Non-core, full-year results in our sugar and bioenergy joint venture are expected to be down considerably from last year reflecting lower Brazilian ethanol prices. Additionally, the company expects the following for 2024: An adjusted annual effective tax rate in the range of 21% to 25%; net interest expense in the range of $300 million to $330 million; capital expenditures in the range of $1.2 billion to $1.4 billion; and depreciation and amortization of approximately $450 million.”