WHITE PLAINS, N.Y. — Net income of Bunge Ltd. in the third quarter ended Sept. 30 fell 9% to $212 million, equal to $1.36 per share on the common stock, down from $232 million, or $1.62 per share, in the same period a year ago. The most recent quarterly results included pre-tax impairment charges of $49 million related to the write-down of a European oilseed processing and refining facility, closing of an edible oils facility in Europe and write-down of administrative offices in Brazil. Results also included a $90 million loss related to repayment of certain loans and long-term debt.
Net sales in the third quarter were $11,662 million, up 3% from $11,298 million in the same period a year ago.
“Bunge produced strong results in the third quarter,” said Alberto Weisser, chairman and chief executive officer. “In agribusiness, our skilled team managed risks well and leveraged our global asset network to serve customers in a volatile market. Our sugar and biorefinery and food and ingredients businesses also performed well, and while fertilizer is performing below its full potential, we are making steady progress in restructuring the business following the sale of our Brazilian nutrients assets in the second quarter.”
Agribusiness earnings before interest and taxes in the third quarter were $313 million, up 10% from $284 million in last year’s third quarter. Sales in the division rose 4% to $7,783 million from $7,453 million.
“Higher results in our grain merchandising business, in which we effectively managed risk in a volatile environment while meeting the product needs of our customers, were partially offset by lower results in oilseed processing, which were impacted by lower margins,” Bunge said. “Impairment charges of $22 million were recorded in the period, primarily related to a European oilseed processing and refining facility.”
Agribusiness volumes were 28,466,000 tonnes, up 3% from 27,738,000 last year.
Edible Oil Products EBIT in the third quarter was $30 million, down 14% from $35 million last year. Sales, meanwhile, rose 2% to $1,495 million from $1,465 million.
“Improved margins in our Brazilian packaged oil and margarine businesses were partially offset by lower results in Europe, which were impacted by tight raw material supplies in certain regions due to the late sunseed harvest,” Bunge said.
Edible Oil Products volume was 1,495,000 tonnes, up 2% from 1,465,000 tonnes.
Milling Products EBIT in the third quarter jumped 457% to $39 million from $7 million in the third quarter last year. Results included a $6 million gain on the sale of an idled wheat milling facility in Brazil, Bunge said. Sales in the most recent quarter moved up only slightly, climbing to $407 million from $403 million.
Milling Products volume was 1,172,000 tonnes, up 9% from 1,071,000 tonnes.
Sugar and Bioenergy EBIT soared 240% to $34 million from $10 million in the same period last year, driven in part by the addition of Moema, a Brazilian sugarcane company. Sales also improved sharply, rising 70% to $1,153 million from $680 million. Volumes totaled 1,651,000 tonnes, up 31% from 1,256,000 tonnes.
Fertilizer returned to profitability in the third quarter, with EBIT of $14 million on sales of $655 million. This compared with a loss of $127 million and sales of $1,190 million in the third quarter of fiscal 2009.
In the nine months ended Sept. 30, Bunge net income was $2,053 million, or $13.09 per share, up sharply from $350 million, or $2.48 per share, during the first nine months of fiscal 2009. Net sales for the nine months rose 9% to $32,981 million from $31,490 million.
Looking ahead to the remainder of the year, Drew Burke, interim chief financial officer, said agribusiness should continue its strong performance while food and ingredients also should have a solid end to the fiscal year. He said the company expects to achieve or exceed its 2010 full-year earnings guidance range of $3.25 to $3.50 per share.