WHITE PLAINS, N.Y. — Amid further deterioration of the company’s earnings picture, Bunge Ltd. on Jan. 22 announced that Gregory A. Heckman, a recent addition to Bunge’s board of directors, has been named acting chief executive officer, effective immediately.
In addition to the executive change, Bunge lowered its EBIT guidance for the year ended Dec. 31, 2018. Bunge said segment EBIT would be below the previously disclosed $1.045 billion low end of the outlook range. The shortfall could be as much as $170 million, including $90 million to $100 million in Bunge’s Agribusiness segment (previous range was $800 million to $1 billion) and $60 million to $70 million in the Sugar and Bioenergy segment (previous forecast was between a $40 million loss and breakeven).
“The Agribusiness shortfall was largely due to the reduction in value of the company’s Brazilian soybean ownership as factors related to China trade and demand caused Brazilian prices to converge with U.S. prices,” Bunge said. “The Sugar and Bioenergy shortfall was primarily due to lower Brazilian ethanol prices, and a weather-related reduction in yields as a poor crop year came to a close.”
Soren W. Schroder in December had announced plans to step down as chairman and c.e.o. Bunge said at the time Mr. Schroder would remain in his post until a successor was named. Also at the time, Kathleen Hyle was named chairman of Bunge’s board, succeeding L. Patrick Lupo in that role immediately.
“Greg has been a valuable addition to our board and Strategic Review Committee, and we are pleased to appoint him as our acting c.e.o.,” Ms. Hyle said. “Our committee has benefited from his counsel and expertise. With Greg in this role, we have a greater opportunity to leverage his perspective, deep industry knowledge and leadership experience, as we take action to improve our results and sharpen our operational focus and execution.”
Mr. Heckman joined the Bunge board in October and has more than 30 years of experience in agribusiness. The founding partner of Flatwater Partners, an Omaha-based investment firm, Mr. Heckman was c.e.o. of The Gavilon Group from the time it was spun off from ConAgra Foods, Inc. (now known as Conagra Brands) in 2008 until 2014. A graduate of the University of Illinois, Urbana-Champaign, Mr. Heckman joined ConAgra Foods in 1984 and was named vice-president and general manager of ConAgra Commodity Services in 1995, president of ConAgra Commodity Services in 1996 and president and chief operating officer of ConAgra Trade Group in 1998. He was named president and c.o.o. of ConAgra Agricultural Products Co. in 2002, president and c.o.o. of the ConAgra Food Ingredients Group in 2002 and president and c.o.o. of ConAgra Commercial Products Group in 2005.
“I look forward to further collaboration with Kathi, the board and our management team, focusing on ways to improve performance and create shareholder value,” Mr. Heckman said. “Bunge is a great company, and our strong foundation and global leadership scale in Agribusiness and Food & Ingredients positions us well for future growth. As a team, we will build on the forward momentum of our strategic review, which is focused on our portfolio, key business drivers and opportunities to enhance shareholder value.”
Bunge said it has established a c.e.o. search committee that will continue its work and “seek to conclude the search as soon as practicable, while ensuring that the process is thorough and deliberate.”
Additionally, Bunge said Mr. Lupo, Ernest Bachrach and Enrique Boilini will not stand to be re-elected to the board at the company’s annual meeting in 2019. The three, among the company’s longest-serving board members, will remain on the board until their terms expire in May.
In the first minutes of trading on the New York Stock Exchange Jan. 22, shares of Bunge fell to $51.54, down 3% and just above the 52-week low of $51.13 set in December.