Bunge reports improved ethanol sales, prices

By Kassidi Andres and Erin Voegele | February 26, 2016

In February, Bunge Ltd., a global agribusiness company with ethanol operations in Brazil, released 2015 financial results, reporting improved prices and sales volumes for Brazilian ethanol.

Within its sugar and bioenergy segment, Bunge noted improved performance in sugarcane milling was partially offset by lower results in global trading and merchandising and an $11 million loss related to its Brazilian renewable oils joint venture.  For the full year, Bunge said milling was both EBIT and cash flow positive, reflecting improved market conditions and operational performance, as well as disciplined capital management. Fourth quarter trading and merchandising results were slightly lower than last year. Results in the company’s biofuel joint ventures were lower than in 2014, primarily due to weaker ethanol market conditions in the U.S. and Argentina.

The sugar and bioenergy segment reported adjusted EBIT of $10 million for the fourth quarter of last year, compared to a $21 million loss reported for the same period of 2014. For the full year, the segment reported a $22 million loss, compared to a $35 million loss in 2014.

Overall, Bunge reported 2015 net sales of $43.48 billion, down from $57.12 billion in 2014. Total adjusted segment EBIT was $1.23 billion last year, up from $1.21 billion in 2014. Adjusted net income per common share from continuing operations-diluted was $4.83 for 2014, up from $4.10 in 2014.

During an investor call, Bunge Chief Financial Officer Drew Burke noted ethanol demand remained strong during the fourth quarter and indicated sugar and ethanol prices have improved. Soren Schroder, CEO of Bunge, added that the ethanol market in Brazil continues to be favorable and 2016 is expected to be a very good year for milling.

Bunge currently operates eight sugarcane mills in Brazil. The facilities have the capacity to process a combined 20 million metric tons of sugarcane annually. In addition to producing sugar and ethanol, the mills also generate renewable electricity via cogeneration. Bunge also has investments in a small number of corn ethanol plants in the United States and Argentina, and participates in a joint venture in Brazil that will use microalgae to convert sugars into tailored oils.