Bunge Reports Third Quarter 2019 Results

WHITE PLAINS, N.Y., Oct. 30, 2019/PRNewswire/ -- Bunge Limited (NYSE: BG)

• Q3 GAAP EPS of $(10.57) vs. $2.39 in the prior year; $1.41 vs. $2.52 on an adjusted basis
• Results included ~$1.7 billion of charges related to portfolio initiatives, primarily the formation of the joint venture for the Brazilian Sugar & Bioenergy business
• Agribusiness managed challenging markets well and benefited from approximately $25 million of net mark-to-market gains, which included $95 million of new gains on forward soy crush margin contraction
• Food & Ingredients performed well, driven by strength in Edible Oils
• Progress continues on streamlining global business structure

• Overview

Greg Heckman, Bunge's Chief Executive Officer, commented, "We navigated uncertain and deteriorating market conditions well.  While we expect headwinds to continue, we are making progress on our key priorities. We have improved our operational execution, as well as our discipline around risk management. Our decision to combine our global and North American headquarters in St. Louis is an important step in the work underway to streamline our global business structure.  We will continue to focus on the business drivers within our control as we execute our mission of delivering results and driving increased returns to shareholders."

• Financial Highlights

• Third Quarter Results

Agribusiness
In Oilseeds, soy crush margins were lower globally driven by the combination of farmer retention of soybeans in anticipation of higher prices and soft export demand for soymeal. Results were negatively impacted by approximately $70 million of mark-to-market reversals on soy crushing contracts, which favorably impacted Q2. However, a decrease in forward soy crush margins during the third quarter resulted in new mark-to-market gains of approximately $95 million, benefiting our results. As we execute on these contracts, mainly in the fourth quarter, we expect these gains to reverse. Softseed processing results were higher than last year, as were results in trading & distribution.

In Grains, origination results were lower in North and South America primarily due to soft export demand, farmer retention related to the U.S.-China trade dispute and the delayed harvest in the U.S. Results in ocean freight and trading & distribution were lower than last year.

Edible Oil Products
Improved performance was largely driven by higher results in North America and Brazil, which benefited from better supply-demand balance of soy oil, as well as improved execution. Bunge Loders Croklaan also contributed to the increased results.

Milling
The decline in segment performance was primarily driven by lower margins in the U.S. and lower volumes and margins in Mexico. Results in Brazil were comparable to last year.

Sugar & Bioenergy
Higher sugarcane milling results were primarily driven by $32 million of lower depreciation due to the Brazilian sugarcane milling business being classified as held for sale, increased cane crush volumes and higher ethanol prices.

Fertilizer
Slightly lower results were in line with the prior year.

Cash Flow
Cash used by operations in the nine months ended September 30, 2019 was approximately $1.3 billion compared to cash used of approximately $3.3 billion in the same period last year. The year-over-year variance was primarily due to a smaller inventory build this year. Trailing four-quarter adjusted funds from operations was approximately $1.0 billion as of the quarter ended September 30, 2019.

Income Taxes
Income taxes for the nine months ended September 30, 2019 were $70 million, which included notable tax benefits of $30 million. The prior year included a $15 million notable tax benefit.

• Outlook

Based on the current agribusiness environment, which has become more challenging, the Company now expects a decline in earnings versus 2018. This outlook excludes notable items, the favorable impact of Bunge Ventures' investment in Beyond Meat and higher results in Sugar & Bioenergy.

Additionally, the Company expects the following for 2019: A tax rate in the range of 20% to 24% excluding notable items; net interest expense in the range of $290 to $300 million; capital expenditures in the range of $520 to $540 million, of which approximately $115 million is related to sugarcane milling; and depreciation, depletion and amortization of approximately $550 million.

• Conference Call and Webcast Details

Bunge Limited's management will host a conference call at 8:00 a.m. EDT on Wednesday, October 30, 2019 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 (877) 270-2148. If you are located outside the United States or Canada, dial (412) 902-6510. 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 "Webcasts and presentations" in the "Investors" section of the company's website. Select "Q3 2019 Bunge Limited 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 October 30, 2019, continuing through November 30, 2019. To listen to it, please dial (877) 344-7529 in the United States, (855) 669-9658 in Canada, or +1 (412) 317-0088 in other locations. When prompted, enter confirmation code 10135433. A replay will also be available in "Past events" at "Webcasts and presentations" in the "Investors" section of the company's website.

• About Bunge Limited

Bunge (www.bunge.com, NYSE: BG) is a world leader in sourcing, processing and supplying oilseed and grain products and ingredients. Founded in 1818, Bunge's expansive network feeds and fuels a growing world, creating sustainable products and opportunities for more than 70,000 farmers and the consumers they serve across the globe. The company is headquartered in New York and has 31,000 employees worldwide who stand behind more than 360 port terminals, oilseed processing plants, grain silos, and food and ingredient production and packaging facilities around the world.

• Webcast Information

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. 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: the outcome and effects of the Board's strategic review; our ability to attract and retain executive management and key personnel;  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 and competitive developments in our industries; the effects of weather conditions and the outbreak of crop and animal disease on our business; global and regional agricultural, economic, financial and commodities market, political, social and health conditions; 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 our cost reduction, margin improvement and other business optimization initiatives; changes in government policies, laws and regulations affecting our business, including agricultural and trade policies, tax regulations and biofuels legislation; 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

The following tables provide 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 total segment EBIT for the quarters and nine months ended September 30, 2019 and 2018.