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Agricultural merchant Bunge beats profit on higher edible oils margin

Credit: REUTERS/BRIAN SNYDER

Agricultural commodities trader Bunge Ltd reported a better-than-expected quarterly profit on Wednesday, driven by higher margins on its edible oil products.

Adds details from earnings, background

Oct 30 (Reuters) - Agricultural commodities trader Bunge Ltd BG.N reported a better-than-expected quarterly profit on Wednesday, driven by higher margins on its edible oil products.

The company said the improved performance in the segment was mostly on account of better results in North America and Brazil because of a better supply-demand balance for soy oil.

Bunge's operations in Brazil and Argentina make it better placed than many rivals, as its South American operations shield it from the ongoing US-China trade war. The company is also streamlining its operations and cutting costs as part of its restructuring program.

Bunge had initiated cost cuts in 2017 and expects to achieve run-rate savings of $250 million by the end of 2019.

However, the company took a $1.7 billion charge related to its Brazilian sugarcane milling business.

Bunge and British energy company BP Plc BP.Lhad said in July they will merge their Brazilian sugar and ethanol operations to create the world's third-largest sugarcane processor. The company has tried to sell its sugar operation in Brazil in the past with no success.

Net loss attributable to Bunge was $1.49 billion, or $10.57 per share, in the third quarter ended Sept.30, compared with a profit of $365 million, or $2.44 per share, a year earlier.

Excluding items, the company earned $1.41 per share, beating analysts' expectation of 48 cents, according to Refinitiv IBES data.

The White Plains, New York-based company said net sales fell 9.5% to $10.32 billion, missing analysts' estimate of $11.31 billion.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi)

((Arundhati.Sarkar@thomsonreuters.com; +1 646 223 8780 Ext: 1524; Reuters Messaging: arundhati.sarkar.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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