Bunge’s Q4 earnings jump on higher crush margins, vegoil demand

Global grain merchant Bunge has reported net income of $551 million in the final quarter of 2020, ending December 31, representing a recovery from a $51 million loss in the same period of 2019, driven by firm vegetable oil demand and higher oilseeds crush margins.

“Our performance in 2020 was exceptional, reflecting the earnings strength of our platform. Our talented team and new operating model allowed us to capture the upside from market opportunities and deepen customer partnerships,” Greg Heckman, Bunge's CEO said in a statement on Wednesday.

The St Louis-based company reported net sales jumped to $12.6 million, up 15% year-on-year.

The total annual volume turnover in agribusiness reached 142.9 million mt, including 35.7 million mt traded during Q4.

Adjusted EBIT in its Oilseeds segment for the quarter increased by almost 40% year-on-year to $275 million, on higher results in oilseeds processing at the company’s assets around the world.

Bunge’s Grain segment reported an adjusted EBIT of $234 million, up 32% compared to $159 million during Q4 2019, driven by benefits from operations in North America, and strong export demand.

On the other side, South American earnings decreased on weaker origination as farmers had accelerated sales earlier in the year.

“Results also benefited from favourable risk management and optimization in our global trading and distribution business,” the company said.

EBIT in the company’s edible oil sector for Q4 jumped 34% year-on-year to $113 million, driven by higher margins in Brazil.

“Higher results in North America were largely due to increased demand from the renewable diesel sector,” Bunge said.

Bunge forecasts a full-year 2021 adjusted earnings per share of at least $6 per share, with lower earnings in its Agribusiness sector, “driven by lower contributions from oilseed processing and origination, particularly in Brazil.”