Bunge reports improved 2014 results for sugar, bioenergy segment

By Erin Voegele | February 18, 2015

Bunge has released fourth quarter and 2014 financial results, reporting improved quarterly performance for its sugarcane milling and biofuels businesses.

Overall, Bunge reported net sales of $13.9 billion for the quarter, down from $16.38 billion during the same period of 2013. The sugar and bioenergy segment reported an adjusted EBIT $9 million loss, an improvement over the $35 million loss reported for the same period of the prior year. Net income per common share from continuing operations-diluted, adjusted, was $1.20, down from $1.35 during the same period of 2013.

For the full year, net sales were $57.83 billion, down from $61.35 billion in 2013. The sugar and bioenergy segment reported an adjusted EBIT loss of $23 million, compared to a loss of $34 million reported for the previous year. Net income per common share from continuing operations-diluted, adjusted, was $4.19, compared to $4.78 in 2013.

 “For Bunge, 2014 was a year of higher returns and strong cash flow from operations, driven by steady commercial and operational improvements and disciplined capital management, said Soren Schroder, CEO of Bunge.

“Our objective of reducing our exposure to the Brazilian sugarcane milling sector is unchanged,” he continued. “In the meantime, our focus is on improving the operations and achieving our short-term financial targets. The business is stable, and we have made significant progress improving agronomic efficiencies and reducing fixed costs. This, combined with an improved outlook for ethanol pricing in Brazil, strong cogeneration margins and hedged sugar, increases our confidence that 2015 will be a year of further improvement.”

According to Bunge, higher results in the sugar and bioenergy segment were driven by improved performances in the company’s sugarcane milling and biofuels businesses. The biofuels business benefited from the robust ethanol production environment in the U.S. In addition, in trading and merchandising, lower margins more than offset high volume.

“In sugar and bioenergy, we are continuing to manage the segment to be self-funding, limiting capital investment to agricultural and industrial maintenance and efficiency projects only,” said Drew Burke, chief financial officer of Bunge. “With the recent improved outlook for Brazilian ethanol pricing, strong cogeneration margins, and our sugar exposure largely hedged, we have increased confidence that the segment will finish the year profitable and free cash flow positive. Similar to past years, we expect results to be seasonally weaker in the first half of the year.”

Information published by Bunge indicates the company operates eight sugarcane mills in Brazil. The facilities, which have a combined capacity of more than 20 million tons, produce sugar, ethanol and electricity. The company also has investments in a small number of corn ethanol plants in the U.S. and Argentina.