Milling & Baking News - November 7, 2006 - 16

F I N A N C I A L

R E S U L T S

Bunge operating profit up solidly;
stronger fourth quarter expected
WHITE PLAINS, N.Y. - Strength in the
company's milling and edible oil businesses helped earnings at Bunge Ltd. in the
third quarter ended Sept. 30, and fueled the
optimism of the company's executives. Net
income for the third quarter totaled $169
million, equal to $1.40 per share on the common stock, down 1% from $170 million, or
$1.41 per share, in the same quarter last
year. This year's results included charges
totaling $18 million, which compared with
one-time gains of $43 million a year earlier.
Net sales for the 2006 third quarter

$65

Bunge share price

per share

$60
$55
$50
$45
Nov.

Jan. March
2006

May

July

Sept.

After dipping earlier this year, Bunge shares have
climbed in recent months to a new 52-week high.

were $6,965 million, up 11% from $6,248
million in the comparable 2005 quarter.
Volume in the 2006 quarter was 30.8
million tonnes, up 3% from 29.7 million
tonnes in the 2005 quarter.
"The environment for our business began to improve in the third quarter," said
Alberto Weisser, chairman and chief executive officer. "Bunge's operating results
were substantially better when compared
to a weak first half and were stronger
than in the same quarter last year. We expect improvement in business conditions
to continue as we move into 2007."
Mr. Weisser said processing margins in
Argentina rose during the quarter as the
industry reduced soy crushing volumes.
He also noted the company's growing
participation in biofuel production.
"Today, Bunge's share of biofuel production from these ventures is 50 million
gallons per year," Mr. Weisser said. "This
should rise to over 300 million gallons
per year in the next two years as capacity comes on stream. More importantly,
the total biofuel production from these
joint ventures should exceed one billion
gallons per year, for which Bunge will
supply most of the raw materials."

Bimbo's U.S. sales rise 6% thanks
to price increase, volume gains
MEXICO CITY - Grupo Bimbo S.A. de
C.V. reported U.S. sales of NP$3,890 million ($362.4 million) for the third quarter
ended Sept. 30. Price hikes implemented in
the first quarter and stable volume growth
accounted for the 6.2% increase from the
previous year's third quarter, when Bimbo
had U.S. sales of NP$3,663 million.
Operating profit in the United
States, however, dropped to NP$17
million from NP$50 million in

the previous year 's third quarter.
The U.S. sales volume growth, according to Bimbo, came about through enhanced relationships with its clients, the
strength of Mexican branded goods and
the development of new products. The
launch of a line of organic bread from
Oroweat proved successful.
Companywide, Mexico City-based
Grupo Bimbo S.A. de C.V. reported
third-quarter net income of NP$957 mil-

U.S. tortilla volume boosts Gruma sales
MONTERREY, MEXICO - Net sales for
Gruma Corp. grew 15% to NP$4,264 million ($397.4 million) in the third quarter
ended Sept. 30 thanks in large part to price
increases, Gruma S.A. de C.V. said. Sales
volume growth and a change in the sales
mix to the tortilla business were other factors in the sales gain for Gruma Corp., a
subsidiary of Gruma S.A. de C.V.
The U.S. tortilla industry drove sales
volume growth of 5% as did, but to a lesser
extent, the effect of acquisitions of a tortilla
plant in California and two in Australia.
16 / Milling & Baking News, November 7, 2006

Operating income of NP$301 million
was down 8% from NP$328 million in
the previous year's third quarter.
Through the first nine months of the
fiscal year, Gruma Corp. reported sales
of NP$12,096 million, a 15% increase,
and operating income of NP$638 million, a 30% decrease.
Companywide, Gruma S.A. de C.V.
reported third-quarter net sales of
NP$7,905 million, an 11% increase, and
third-quarter net income of NP$502 million, up 23%. MBN

For the milling segment overall, sales
for the quarter were $242 million, up 9%
from $223 million in the third quarter of
2005. Operating profit for the segment
was $14 million, down 13% from $16
million. Wheat milling benefited from
higher volumes and margins, but was
offset by volume and margin declines in
corn milling, Bunge said.
Higher volumes and improved margins
in Europe benefited edible oil results, Bunge
said. Strong results in Brazil more than offset lower results in North America.
Net sales in the edible oil segment for
the 2006 quarter were $955 million, up
9% from $879 million. Operating income
soared 225% to $26 million from $8 million in the third quarter of fiscal 2005.
Overall, net income for Bunge in the
nine months ended Sept. 30 totaled $257
million, or $2.13 per share, down 33%
from $381 million, or $3.18 per share.
Net sales for the first nine months were
$18,591 million, up 5% from $17,624 million
in the comparable 2005 period. Volume was
86.2 million tonnes, down 2% from 87.8 million tonnes in the first nine months of 2005.
Looking ahead to the fourth quarter,
Bill Wells, chief financial officer, said the
company expects solid results, as fertilizer sales rebound and harvest provides a
bump to North American and European
agribusiness. MBN

lion, nearly 26% higher than NP$762
million last year. Net companywide
sales of NP$16,155 million were more
than 9% higher than NP$14,795 million
in the previous year's third quarter. In
September, the company's net debt was
NP$2,572 million, almost 44% less than
its net debt in September 2005.
Third-quarter sales in Mexico jumped
more than 9% to NP$11,308 million from
NP$10,367 million. The integration of
the recently acquired El Globo operations contributed 2.6 percentage points.
A combined result of consistent sales
volume and higher prices implemented
in the second quarter were more important factors in the sales gain. Mexican
operating income of NP$1,552 million in
this year's third quarter compared with
NP$1,534 million last year.
Latin American sales increased more
than 25% to NP$1,375 million in the third
quarter. Operating profit was NP$40 million, which compared with NP$13 million in the previous year's third quarter.
For the first nine months of the fiscal year, Grupo Bimbo S.A. de C.V. reported sales of NP$46,536 million and
net income of NP$2,457 million. U.S.
sales were NP$11,627 million over the
first nine months. Operating profit was
NP$158 million. MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - November 7, 2006

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