Bunge Limited (NYSE:BG) today reported second quarter 2021
results
- Q2 GAAP EPS of $2.37 vs. $3.47 in the prior year; $2.61 vs.
$1.88 on an adjusted basis excluding certain gains/charges and
mark-to-market timing differences
- Continued strong Agribusiness execution across the global
network
- Outstanding Refined and Specialty Oils results driven by
increasing demand and record refining capacity utilization
- Increasing full-year adjusted EPS outlook to at least $8.50
based on strong Q2 results
- Updating mid-cycle earnings baseline with $2 per share
increase reflecting structural changes in oilseed market
environment and greater execution benefits from new operating
model
Greg Heckman, Bunge's Chief Executive Officer, commented, "Our
team outperformed expectations by effectively navigating global
volatility to produce another strong quarter of results. Our
industrial, commercial and risk management teams collaborated
throughout the value chains, optimizing trade flows and production
volumes while reducing unplanned downtime.
“With an accelerating structural shift in demand for sustainable
food, feed and fuel, Bunge’s position in the global agribusiness
supply chain provides growing opportunity to partner with customers
to meet their needs in this changing environment,” continued Mr.
Heckman. “We are proud of our work with farmers and customers to
sustainably connect supply and demand, develop innovative products
and services and create new plant-based solutions.”
Quarter Ended
June 30,
Six Months Ended
June 30,
(US$ in millions, except per share
data)
2021
2020
2021
2020
Net income attributable to
Bunge
$
362
$
516
$
1,194
$
332
Net income per common
share-diluted
$
2.37
$
3.47
$
7.85
$
2.14
Mark-to-market timing difference (a)
$
0.24
$
(2.00
)
$
(1.05
)
$
0.13
Certain (gains) and charges (b)
$
—
$
0.44
$
(1.08
)
$
0.46
Adjustment of redeemable noncontrolling
interest (c)
$
—
$
(0.03
)
$
—
$
0.07
Adjusted Net income per common
share-diluted (d)
$
2.61
$
1.88
$
5.72
$
2.80
Core Segment EBIT (d) (e)
$
500
$
949
$
1,652
$
893
Mark-to-market timing difference (a)
50
(385
)
(195
)
25
Certain (gains) & charges (b)
—
—
(170
)
—
Adjusted Core Segment EBIT (d)
$
550
$
564
$
1,287
$
918
Corporate and Other EBIT (d)
$
(60
)
$
(123
)
$
(146
)
$
(187
)
Certain (gains) & charges (b)
—
66
—
71
Adjusted Corporate and Other EBIT
(d)
$
(60
)
$
(57
)
$
(146
)
$
(116
)
Non-core Segment EBIT (d) (f)
$
19
$
(88
)
$
39
$
(138
)
Certain (gains) & charges (b)
—
—
—
—
Adjusted Non-core Segment EBIT
(d)
$
19
$
(88
)
$
39
$
(138
)
Total Segment EBIT (d)
$
459
$
738
$
1,545
$
568
Mark-to-market timing difference (a)
50
$
(385
)
$
(195
)
$
25
Total Certain (gains) & charges
(b)
—
$
66
$
(170
)
$
71
Adjusted Total Segment EBIT (d)
$
509
$
419
$
1,180
$
664
(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)
Retained earnings impact associated with
an adjustment to the carrying amount of the redeemable
noncontrolling interest recorded in respect of our 70% ownership
interest in Loders. See note 4 in the Additional Financial
information section of this release for details.
(d)
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.
(e)
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.
(f)
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
Quarter Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Volumes (in thousand metric
tons)
39,533
38,268
75,889
70,950
Net Sales
$
11,654
$
6,925
$
21,444
$
13,307
Gross Profit
$
410
$
907
$
1,295
$
904
Selling, general and administrative
expense
$
(114
)
$
(109
)
$
(194
)
$
(218
)
Foreign exchange gains (losses)
$
36
$
31
$
29
$
19
EBIT attributable to noncontrolling
interests
$
(3
)
$
(8
)
$
(11
)
$
(5
)
Other income (expense) - net
$
24
$
31
$
46
$
24
Income (loss) from affiliates
$
11
$
21
$
35
$
28
Segment EBIT
$
364
$
873
$
1,200
$
752
Mark-to-market timing difference
39
(378
)
(196
)
7
Certain (gains) & charges
—
—
—
—
Adjusted Segment EBIT
$
403
$
495
$
1,004
$
759
Certain (gains) & charges, Net Income
(Loss) Attributable to Bunge
$
—
$
—
$
—
$
—
Certain (gains) & charges, Earnings
Per Share
$
—
$
—
$
—
$
—
Processing (2)
Quarter Ended
Six Months Ended
(US$ in millions)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Processing EBIT
$
338
$
648
$
1,067
$
593
Mark-to-market timing difference
(129
)
(301
)
(495
)
(37
)
Certain (gains) & charges
—
—
—
—
Adjusted Processing EBIT
$
209
$
347
$
572
$
556
In Processing, higher results in North America and Argentina
were more than offset by lower results in Europe and to a greater
extent in Brazil, which included a decreased contribution from
soybean origination due to an accelerated pace of farmer selling in
the prior year.
Merchandising (2)
Quarter Ended
Six Months Ended
(US$ in millions)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Merchandising EBIT
$
26
$
225
$
133
$
159
Mark-to-market timing difference
168
(77
)
299
44
Certain (gains) & charges
—
—
—
—
Adjusted Merchandising EBIT
$
194
$
148
$
432
$
203
In Merchandising, improved performance was primarily driven by
higher results in ocean freight, due to strong execution, and our
global grain value chains, which benefited from increased volumes
and margins.
Refined & Specialty Oils
Quarter Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Volumes (in thousand metric
tons)
2,246
2,286
4,451
4,640
Net Sales
$
3,198
$
2,129
$
5,924
$
4,455
Gross Profit
$
195
$
146
$
430
$
275
Selling, general and administrative
expense
$
(90
)
$
(89
)
$
(176
)
$
(183
)
Foreign exchange gains (losses)
$
1
$
(4
)
$
2
$
3
EBIT attributable to noncontrolling
interests
$
(5
)
$
—
$
(83
)
$
5
Other income (expense) - net
$
1
$
(2
)
$
237
$
(2
)
Segment EBIT
$
102
$
51
$
410
$
98
Mark-to-market timing difference
11
(3
)
(3
)
17
Certain (gains) & charges
—
—
(170
)
—
Adjusted Segment EBIT
$
113
$
48
$
237
$
115
Certain (gains) & charges, Net Income
(Loss) Attributable to Bunge
$
—
$
—
$
(165
)
$
—
Certain (gains) & charges, Earnings
Per Share
$
—
$
—
$
(1.08
)
$
—
Refined & Specialty Oils Summary
The outstanding performance in the quarter was largely driven by
higher margins and record capacity utilization in North America
refining, which benefited from strong food service demand and
increased demand from the renewable diesel sector. Improved results
in South America were due to the combination of higher margins and
lower costs, more than offsetting lower volumes. Europe benefited
from increased volumes and margins.
Milling
Quarter Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Volumes (in thousand metric
tons)
1,508
1,261
3,247
3,199
Net Sales
$
471
$
382
$
862
$
797
Gross Profit
$
57
$
53
$
91
$
100
Selling, general and administrative
expense
$
(25
)
$
(28
)
$
(48
)
$
(54
)
Foreign exchange gains (losses)
$
2
$
—
$
—
$
(2
)
Segment EBIT
$
34
$
25
$
42
$
43
Mark-to-market timing difference
—
(4
)
4
1
Certain (gains) & charges
—
—
—
—
Adjusted Segment EBIT
$
34
$
21
$
46
$
44
Certain (gains) & charges, Net Income
(Loss) Attributable to Bunge
$
—
$
—
$
—
$
—
Certain (gains) & charges, Earnings
Per Share
$
—
$
—
$
—
$
—
Milling Summary
Higher volumes, lower costs and good supply chain execution in
South America were the primary drivers of improved performance in
the quarter. Results in North America were comparable with last
year.
Corporate and Other
Quarter Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Gross Profit
$
2
$
(1
)
$
(6
)
$
(2
)
Selling, general and administrative
expense
$
(68
)
$
(120
)
$
(150
)
$
(185
)
Foreign exchange gains (losses)
$
(4
)
$
—
$
(6
)
$
1
Other income (expense) - net
$
10
$
(2
)
$
15
$
(1
)
Segment EBIT
$
(60
)
$
(123
)
$
(146
)
$
(187
)
Certain (gains) & charges
—
66
—
71
Adjusted Segment EBIT
$
(60
)
$
(57
)
$
(146
)
$
(116
)
Certain (gains) & charges, Net Income
(Loss) Attributable to Bunge
$
—
$
66
$
—
$
69
Certain (gains) & charges, Earnings
Per Share
$
—
$
0.44
$
—
$
0.46
Corporate
Quarter Ended
Six Months Ended
(US$ in millions)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Corporate EBIT
$
(71
)
$
(58
)
$
(157
)
$
(130
)
Certain (gains) & charges
—
—
—
5
Adjusted Corporate EBIT
$
(71
)
$
(58
)
$
(157
)
$
(125
)
Other
Quarter Ended
Six Months Ended
(US$ in millions)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Other EBIT
$
11
$
(65
)
$
11
$
(57
)
Certain (gains) & charges
—
66
—
66
Adjusted Other EBIT
$
11
$
1
$
11
$
9
Corporate and Other Summary
The increase in Corporate expenses during the quarter was
primarily related to performance-based compensation accruals. The
increase in Other was related to our captive insurance program.
Non-core Segments
Sugar & Bioenergy
Quarter Ended
Six Months Ended
(US$ in millions, except per share
data)
Jun 30, 2021
Jun 30, 2020
Jun 30, 2021
Jun 30, 2020
Volumes (in thousand metric
tons)
97
62
200
148
Net Sales
$
68
$
26
$
122
$
76
Gross Profit
$
1
$
—
$
2
$
2
Income (loss) from affiliates
$
18
$
(88
)
$
37
$
(139
)
Segment EBIT
$
19
$
(88
)
$
39
$
(138
)
Certain (gains) & charges
—
—
—
—
Adjusted Segment EBIT
$
19
$
(88
)
$
39
$
(138
)
Certain (gains) & charges, Net Income
(Loss) Attributable to Bunge
$
—
$
—
$
—
$
—
Certain (gains) & charges, Earnings
Per Share
$
—
$
—
$
—
$
—
Sugar & Bioenergy Summary
Improved results in the quarter were primarily driven by higher
ethanol volume and margins. Prior year results were negatively
impacted by approximately $70 million in foreign exchange
translation losses on U.S. dollar denominated debt of the joint
venture due to depreciation of the Brazilian real.
Cash Flow
Six Months Ended
Jun 30, 2021
Jun 30, 2020
Cash used for operating activities
$
(1,436
)
$
(1,502
)
Proceeds from beneficial interest in
securitized trade receivables
2,049
748
Cash (used for) provided by operating
activities, adjusted
$
613
$
(754
)
Cash used for operations in the six months ended June 30, 2021
was $1,436 million compared to cash used of $1,502 million in the
same period last year. Adjusting for the proceeds from beneficial
interest in securitized trade receivables, cash provided from
operating activities was $613 million compared with cash used for
operating activities of $754 million in the prior year. Funds from
operations (FFO) adjusted for notable items and mark-to-market
timing differences was $900 million compared to $817 million in the
prior year(5).
Income Taxes
For the six months ended June 30, 2021, income tax expense was
$242 million compared to an income tax expense of $113 million for
the prior year. The increase in income tax expense is due to higher
pre-tax income, partially offset by a lower estimated effective tax
rate for 2021.
COVID-19 Update
Bunge continues to take proactive steps to protect the health
and safety of its employees, their families and the communities in
which it operates. Through an internal task force, the Company
closely monitors developments related to the pandemic and provides
guidance to its facilities worldwide. Each of Bunge’s facilities
around the globe is taking steps to respond to COVID-19 based on
the nature of its operations and the guidelines from and actions
being taken by local governments. The Company has continued to
restrict travel, follow upgraded cleaning practices at its
facilities and offices, put in place remote work arrangements for
teammates wherever possible, reduce staffing in its production and
other facilities and keep social distancing and other safety
related measures in place. Bunge is strongly encouraging its
employees to be vaccinated when available in their countries, and
facilitating this when possible.
Numerous countries around the globe, including places where
Bunge operates production facilities or maintains offices, have
continued to impose quarantines and significant restrictions,
including shelter-in-place or stay-at-home orders. Additionally, a
rise in the number of observed COVID-19 cases in certain parts of
the world may lead to governments re-imposing travel and work
restrictions or imposing additional restrictions. In locations
where such restrictions are in place, Bunge has been deemed an
essential or life-sustaining operation. To date, the Company has
not seen a significant disruption in its supply chain, has been
able to mitigate logistics and distribution issues that have
arisen, and substantially all of its facilities around the world
have continued to operate at or near normal levels. Bunge continues
to monitor local, regional and national governmental actions that
could limit or restrict the movement of agricultural commodities or
products or otherwise disrupt physical product flows or its ability
to operate in the future.
We are increasing our full-year 2021 EPS outlook to reflect our
strong second quarter results. We are now forecasting full-year
2021 adjusted EPS of at least $8.50 per share.
In Agribusiness, results are expected to be modestly up from our
previous outlook, but still forecasted to be down from a very
strong 2020.
In Refined and Specialty Oils, results are expected to be up
from our previous outlook reflecting our strong second quarter
results and positive trends in North America being driven by
increased demand from food service and renewable diesel.
We continue to expect results in Milling and Corporate and Other
to be generally in line with last year.
Additionally, the Company now expects the following for 2021: an
adjusted annual effective tax rate in the range of 17% to 19%; net
interest expense in the range of $220 to $230 million; capital
expenditures in the range of $450 to $500 million; and depreciation
and amortization of approximately $420 million.
In Non-Core, full-year results in the sugar and bioenergy joint
venture are expected to be a positive contributor.
- Updated Mid-Cycle Earnings Baseline
The Company has also updated its mid-cycle baseline EPS. This
update reflects structural improvement in oilseed market
fundamentals, as well as greater benefits following the change in
Bunge’s operating model to a global value chain approach. We now
estimate our mid-cycle EPS is $7, an increase of $2 from the
baseline provided at the Company’s Virtual Business Update Meeting
on June 24, 2020.
- 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 Wednesday, July 28, 2021 to
discuss the company’s results.
Additionally, a slide presentation to accompany the discussion
of results will be posted on www.bunge.com.
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.
To access the webcast, go to “Events and presentations” in the
“Investors” section of the company’s website. Select “Q2 2021 Bunge
Limited Earnings 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.
A replay of the call will be available later in the day on July
28, 2021, continuing through August 28, 2021. 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 10157435. A replay will also be available
in "Past events" at "Events and presentations" in the "Investors"
section of the company's website.
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 put quality food on the
table, increase sustainability where we operate, strengthen global
food security, 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 improve the productivity and environmental efficiency of
agriculture across our value chains and to bring quality products
from where they’re grown to where they’re consumed. At the same
time, we collaborate with our customers to create and reimagine the
future of food, developing 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
more than 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, 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 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: industry conditions, including fluctuations in supply,
demand and prices for agricultural commodities and other raw
materials and products used in our business, fluctuations in energy
and freight costs; competitive developments in our industries; the
effects of weather conditions and the outbreak of crop and animal
disease on our business; global and regional economic,
agricultural, financial and commodities market, political, social
and health conditions; the impacts of pandemic outbreaks, including
COVID-19; the outcome of pending regulatory and legal proceedings;
our ability to complete, integrate and benefit from acquisitions,
dispositions, joint ventures and strategic alliances; our ability
to achieve the efficiencies, savings and other benefits anticipated
from cost reduction, margin improvement, operational excellence and
other business optimization initiatives; changes in government
policies, laws and regulations affecting our business, including
agricultural and trade policies and environmental, tax and biofuels
regulation; our capital allocation plans, funding needs and
financing sources; changes in foreign exchange policy or rates; the
outcome of our portfolio rationalization initiatives; the
effectiveness of our risk management strategies; our ability to
attract and retain executive management and key personnel;
operational risks, including industrial accidents, natural
disasters and cybersecurity incidents; 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.
- 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 June 30, 2021 and 2020.
(US$ in millions, except per share
data)
Net Income (Loss)
Attributable to
Bunge
Earnings
Per Share
Diluted
Segment
EBIT
Quarter Ended June 30,
2021
2020
2021
2020
2021
2020
Core Segments:
$
—
$
—
$
—
$
—
$
—
$
—
Agribusiness
$
—
$
—
$
—
$
—
$
—
$
—
Refined and Specialty Oil
Products
$
—
$
—
$
—
$
—
$
—
$
—
Milling Products
$
—
$
—
$
—
$
—
$
—
$
—
Corporate and Other:
$
—
$
(66
)
$
—
$
(0.44
)
$
—
$
(66
)
Commercial claim provision
—
(66
)
—
(0.44
)
—
(66
)
Non-core Segment:
$
—
$
—
$
—
$
—
$
—
$
—
Sugar & Bioenergy
$
—
$
—
$
—
$
—
$
—
$
—
Total
$
—
$
(66
)
$
—
$
(0.44
)
$
—
$
(66
)
See Definition and Reconciliation of Non-GAAP Measures.
Corporate and Other
EBIT for the quarter ended June 30, 2020 included a $66 million
charge primarily related to a provision against an aged receivable
dating from 2015 that in the quarter ended June 30, 2020 became
deemed uncollectible as part of an anticipated legal settlement.
For this matter $51 million was recorded in SG&A and $15
million was recorded in Other income (expense) - net.
Certain gains and (charges), year-to-date
The following table provides a summary of certain gains and
(charges) that may be of interest to investors, including a
description of these items and their effect on Net income (loss)
attributable to Bunge, Earnings per share diluted and Segment EBIT
for the six month periods ended June 30, 2021 and 2020.
(US$ in millions, except per share
data)
Net Income (Loss)
Attributable to
Bunge
Earnings
Per Share
Diluted
Segment
EBIT
Six months ended June 30,
2021
2020
2021
2020
2021
2020
Core Segments:
$
165
$
—
$
1.08
$
—
$
170
$
—
Agribusiness
$
—
$
—
$
—
$
—
$
—
$
—
Refined and Specialty Oil
Products
$
165
$
—
$
1.08
$
—
$
170
$
—
Gain on sales of assets
165
—
1.08
—
170
—
Milling Products
$
—
$
—
$
—
$
—
$
—
$
—
Corporate and Other:
$
—
$
(69
)
$
—
$
(0.46
)
$
—
$
(71
)
Severance, employee benefit, and other
costs
—
(3
)
—
(0.02
)
—
(5
)
Commercial claim provision
—
(66
)
—
(0.44
)
—
(66
)
Non-core Segment:
$
—
$
—
$
—
$
—
$
—
$
—
Sugar & Bioenergy
$
—
$
—
$
—
$
—
$
—
$
—
Total
$
165
$
(69
)
$
1.08
$
(0.46
)
$
170
$
(71
)
Core Segments
Refined and Specialty Oil Products
EBIT for the six months ended June 30, 2021 included $170
million in gains on sale of assets, comprised of a $151 million
gain on sale of our Rotterdam Oils Refinery, at Bunge's 70% share,
and a $19 million gain on sale of an oils packaging facility in
Mexico, both recorded in Other income (expense) - net.
Corporate and Other
EBIT for the six month period ended June 30, 2020 included a $66
million charge primarily related to a provision against an aged
receivable dating from 2015 that in the quarter ended June 30, 2020
became deemed uncollectible as part of an anticipated legal
settlement. For this matter $51 million was recorded in SG&A
and $15 million was recorded in Other income (expense) - net. EBIT
for the six month period ended June 30, 2020 also included $5
million of charges related to the relocation of Bunge’s global
headquarters from White Plains, New York to St. Louis, Missouri,
included in SG&A.
- Consolidated Earnings Data (Unaudited)
Quarter Ended
June 30,
Six Months Ended
June 30,
(US$ in millions, except per share
data)
2021
2020
2021
2020
Net sales
$
15,391
$
9,462
$
28,352
$
18,635
Cost of goods sold
(14,726
)
(8,357
)
(26,540
)
(17,356
)
Gross profit
665
1,105
1,812
1,279
Selling, general and administrative
expenses
(297
)
(346
)
(568
)
(641
)
Foreign exchange gains (losses)
35
27
25
21
Other income (expense) – net
35
27
298
20
Income (loss) from affiliates
29
(67
)
73
(111
)
EBIT attributable to noncontrolling
interest (a) (1)
(8
)
(8
)
(95
)
—
Total Segment EBIT
459
738
1,545
568
Interest income
6
6
15
13
Interest expense
(54
)
(62
)
(127
)
(139
)
Income tax (expense) benefit
(50
)
(168
)
(242
)
(113
)
Noncontrolling interest share of interest
and tax (a) (1)
1
2
3
3
Net income (loss) attributable to Bunge
(1)
362
516
1,194
332
Convertible preference share dividends
(9
)
(9
)
(17
)
(17
)
Adjustment of redeemable noncontrolling
interest
—
5
—
(10
)
Net income (loss) available to Bunge
common shareholders - basic and diluted
$
353
$
512
$
1,177
$
305
Add back convertible preference share
dividends
9
9
17
17
Net income (loss) available to Bunge
common shareholders - diluted
$
362
$
521
$
1,194
$
322
Net income (loss) per common share
diluted attributable to Bunge common shareholders
$
2.37
$
3.47
$
7.85
$
2.14
Weighted–average common shares
outstanding - diluted
153
150
152
151
(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)
June 30,
December 31,
(US$ in millions)
2021
2020
Assets
Cash and cash equivalents
$
464
$
352
Trade accounts receivable, net
2,526
1,717
Inventories (a)
8,460
7,172
Assets held for sale
424
672
Other current assets
5,681
6,268
Total current assets
17,555
16,181
Property, plant and equipment, net
3,719
3,775
Operating lease assets
858
868
Goodwill and other intangible assets,
net
1,081
1,115
Investments in affiliates
714
631
Other non-current assets
1,158
1,085
Total assets
$
25,085
$
23,655
Liabilities and Equity
Short-term debt
$
1,826
$
2,828
Current portion of long-term debt
33
8
Trade accounts payable
3,634
2,636
Current operating lease obligations
265
235
Liabilities held for sale
55
438
Other current liabilities
4,508
4,840
Total current liabilities
10,321
10,985
Long-term debt
5,334
4,452
Non-current operating lease
obligations
539
581
Other non-current liabilities
1,077
1,017
Total liabilities
17,271
17,035
Redeemable noncontrolling
interest
483
415
Total equity
7,331
6,205
Total liabilities, redeemable
noncontrolling interest and equity
$
25,085
$
23,655
(a) Includes readily marketable
inventories of $6,930 million and $5,961 million at June 30, 2021
and December 31, 2020, respectively. Of these amounts, $5,629
million and $4,369 million, respectively, can be attributable to
merchandising activities.
- Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(US$ in millions)
2021
2020
Operating Activities
Net income (loss) (1)
$
1,286
$
329
Adjustments to reconcile net income (loss)
to cash provided by (used for) operating activities:
Foreign exchange (gain) loss on net
debt
(133
)
(107
)
Depreciation, depletion and
amortization
212
217
Deferred income tax expense (benefit)
(83
)
50
(Gain) loss on sale of investments and
property, plant and equipment
(240
)
(18
)
Other, net
(24
)
216
Changes in operating assets and
liabilities, excluding the effects of acquisitions:
Trade accounts receivable
(784
)
(99
)
Inventories
(1,003
)
(1,308
)
Secured advances to suppliers
25
(218
)
Trade accounts payable and accrued
liabilities
737
75
Advances on sales
(150
)
(84
)
Net unrealized (gain) loss on derivative
contracts
639
3
Margin deposits
391
(90
)
Marketable securities
(5
)
62
Beneficial interest in securitized trade
receivables
(2,121
)
(761
)
Other, net
(183
)
231
Cash provided by (used for) operating
activities
(1,436
)
(1,502
)
Investing Activities
Payments made for capital expenditures
(133
)
(127
)
Proceeds from investments
26
238
Payments for investments
(153
)
(226
)
Settlement of net investment hedges
(25
)
66
Proceeds from beneficial interest in
securitized trade receivables
2,049
748
Payments for beneficial interest in
securitized trade receivables
(177
)
—
Proceeds from the sale of investments and
property, plant and equipment
345
5
Payments for investments in affiliates
(42
)
(2
)
Other, net
(1
)
26
Cash provided by (used for) investing
activities
1,889
728
Financing Activities
Net borrowings (repayments) of short-term
debt
(968
)
805
Net proceeds (repayments) of long-term
debt
998
195
Proceeds from the exercise of options for
common shares
72
2
Repurchases of common shares
—
(100
)
Dividends paid to common and preference
shareholders
(158
)
(159
)
Acquisition of noncontrolling interest
(147
)
—
Other, net
(27
)
(17
)
Cash provided by (used for) financing
activities
(230
)
726
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
(100
)
5
Net increase (decrease) in cash and
cash equivalents and restricted cash
123
(43
)
Cash and cash equivalents and
restricted cash - beginning of period
381
322
Cash and cash equivalents and
restricted cash - end of period
$
504
$
279
- 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
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 its corporate and other
activities, respectively. 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, 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,
and Total Segment EBIT, respectively.
Core Segment EBIT, Non-Core Segment EBIT, Total Segment EBIT,
Adjusted Core Segment EBIT, Adjusted Non-Core Segment 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) available for common shareholders
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 2021. This information is provided only on a non-GAAP
basis without reconciliation to projected net income per common
share for 2021, the mostly directly comparable GAAP measure, due to
the inability at this time to quantify certain amounts necessary
for such reconciliation, including but not limited to 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:
Quarter Ended
June 30,
Six Months Ended
June 30,
(US$ in millions)
2021
2020
2021
2020
Net income (loss) attributable to
Bunge
$
362
$
516
$
1,194
$
332
Interest income
(6
)
(6
)
(15
)
(13
)
Interest expense
54
62
127
139
Income tax expense (benefit)
50
168
242
113
Noncontrolling interest share of interest
and tax
(1
)
(2
)
(3
)
(3
)
Total Segment EBIT
$
459
$
738
$
1,545
$
568
Agribusiness EBIT
$
364
$
873
$
1,200
$
752
Refined and Specialty Oils EBIT
102
51
410
$
98
Milling EBIT
34
25
42
$
43
Core Segment EBIT
$
500
$
949
$
1,652
$
893
Corporate and Other EBIT
$
(60
)
$
(123
)
$
(146
)
$
(187
)
Sugar & Bioenergy EBIT
19
(88
)
39
(138
)
Non-Core Segment EBIT
$
19
$
(88
)
$
39
$
(138
)
Total Segment EBIT
$
459
$
738
$
1,545
$
568
Mark-to-market timing difference
50
(385
)
(195
)
25
Certain (gains) & charges
—
66
(170
)
71
Adjusted Total Segment EBIT
$
509
$
419
$
1,180
$
664
Below is a reconciliation of Net income attributable to Bunge,
to Adjusted Net income (loss) available for common
shareholders:
Quarter Ended
June 30,
Six Months Ended
June 30,
(US$ in millions, except per share
data)
2021
2020
2021
2020
Net income (loss) attributable to
Bunge
$
362
$
516
$
1,194
$
332
Mark-to-market timing difference
36
(300
)
(159
)
20
Certain (gains) and charges:
Severance, employee benefit, and other
—
—
—
3
Commercial claim provision
—
66
—
66
Gain on sales of assets
—
—
(165
)
—
Adjusted Net income (loss) available
for common shareholders
$
398
$
282
$
870
$
421
Weighted-average common shares outstanding
- diluted, adjusted (a)
153
150
152
151
Adjusted Net income (loss) per common
share - diluted
$
2.61
$
1.88
$
5.72
$
2.80
(a) Approximately zero and 7 million
outstanding stock options and contingently issuable restricted
stock units were not dilutive and not included in the
weighted-average number of common shares outstanding for the three
months ended June 30, 2021 and 2020, respectively. Approximately 2
million and 6 million outstanding stock options and contingently
issuable restricted stock units were not dilutive and not included
in the weighted-average number of common shares outstanding for the
six months ended June 30, 2021 and 2020, respectively.
(1)
A reconciliation of Net income (loss)
attributable to Bunge, to Net income (loss) is as follows:
Six Months Ended June
30,
(US$ in millions)
2021
2020
Net income (loss) attributable to
Bunge
$
1,194
$
332
EBIT attributable to noncontrolling
interest
95
—
Noncontrolling interest share of interest
and tax
(3
)
(3
)
Net income (loss)
$
1,286
$
329
(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; 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 and
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)
In the reconciliation of Net income (loss)
per common share - diluted ("GAAP EPS") to Adjusted Net income
(loss) per common share - diluted ("Adjusted EPS"), the item
"Adjustment of redeemable noncontrolling interest" represents the
impact on GAAP EPS of a retained earnings adjustment associated
with the carrying amount of the redeemable noncontrolling interest
recorded in respect of our 70% ownership interest in Loders. The
carrying amount of redeemable noncontrolling interests is the
greater of: (i) the initial carrying amount, increased or decreased
for the noncontrolling interests’ share of net income or loss,
equity capital contributions and distributions or (ii) the
redemption value. Any resulting increases in the redemption value,
in excess of the initial carrying amount, increased or decreased
for the noncontrolling interests’ share of net income or loss,
equity capital contributions and distributions, are affected by
corresponding charges against retained earnings. Additionally, any
such charges to retained earnings will affect Net income (loss)
available to Bunge common shareholders as part of Bunge's
calculation of GAAP EPS.
Bunge's management excludes the
“Adjustment of redeemable noncontrolling interest" from its
calculation of Adjusted EPS, on the basis that it is independent of
the Company's operations. However, such charges reverse only to the
extent that Loders' net income levels result in the carrying amount
of redeemable noncontrolling interests, calculated as described
above, exceeding the redemption value.
(5)
A reconciliation of Cash provided by (used
for) operating activities to Adjusted funds from operations (FFO)
is as follows:
Six Months Ended June
30,
(US$ in millions)
2021
2020
Cash provided by (used for) operating
activities
$
(1,436
)
$
(1,502
)
Foreign exchange gain (loss) on net
debt
133
107
Working capital changes
2,454
2,189
Net (income) loss attributable to
noncontrolling interests and redeemable noncontrolling
interests
(92
)
3
Mark-to-Market timing difference, after
tax
(159
)
20
Adjusted FFO
$
900
$
817
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210728005306/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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