Milling & Baking News - February 26, 2008 - 50

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50 / February 26, 2008

Milling & Baking News

Financial Results

WHITE PLAINS, N.Y. - Bunge Ltd.
posted net income of $778 million in
the fiscal year ended Dec. 31, equal to
$5.95 per share on the common stock,
up 49% from $521 million, or $4.28
per share, in fiscal 2006. Net sales
soared 71% to $44,804 million from
$26,274 million. The strong full-year
results came despite a difficult fourth
quarter in which profit was weighed
down by restructuring
and other charges.
During the year, the
company incurred impairment and restructuring charges of $78 million,
including $30 million in
the agribusiness segment, $35 million
in the edible oil products segment and
$13 million in the milling products
segment. Offsetting the decline was a
$22 million gain on the sale of assets.
A year earlier, Bunge sustained restructuring and impairment charges
of $24 million.
"2007 was an outstanding year,"
said Alberto Weisser, chairman and
chief executive officer. "Bunge leveraged its integrated, global operations,
leading positions in key markets and
good teamwork to produce record results.
"In 2007, the agribusiness and fertilizer markets were characterized by
improved structural conditions. Demand for Bunge's end products grew
and farm economics in Brazil strengthened. Our risk management strategies
performed well in a dynamic market,
and we were well-positioned to serve
customers during a period marked by
significant supply dislocations."
While reflecting on 2007, Mr. Weisser said some of the same conditions
that made the past year successful
should continue in 2008.
"The U.S.D.A. forecasts higher
global protein meal and vegetable oil
demand, as well as strong demand
for and trade in other agricultural
commodities," he said. "Crop prices
should remain high, promoting input
purchases by farmers. Not all market
forces are working in Bunge's favor,
however. For example, the strong real
will increase local costs in our Brazilian businesses, and higher input costs
could pressure margins in fertilizer
and edible oils during the year."
Despite success for the full year,
results for the fourth quarter were
challenging. In the fourth quarter
ended Dec. 31, net income fell 7% to
$245 million, or $1.82 per share, down

from $264 million, or $2.12 per share.
Meanwhile, sales rose 82% to $14,018
million.
Operating profit in the company's
Milling Products segment fell 55%
in 2007 to $31 million. For the fourth
quarter, the segment posted a loss of
$14 million, which compared with
operating profit of $21 million in the
fourth quarter a year ago. Higher raw

material and operating costs in wheat
milling more than offset improved results in corn milling. Another factor in
the fourth-quarter decline was a $13
million impairment charge related to
the closing of a wheat milling facility in Brazil. Net sales in the segment
climbed 41% to $1,361 million for the
year and advanced 66% to $417 million for the quarter.
Operating profit in the Agribusiness
segment rose 447% in the year to $624
million, up from $114 million. Fourthquarter profit, meanwhile, jumped to
$264 million from $75 million in the
same period a year ago. Bunge said
stronger agribusiness results were
driven by improved performance in
South America and North America,
which benefited from higher oilseed
processing and grain origination margins and volumes.
Sales in the Agribusiness segment
rose 79% to $33,877 million during the
year, and for the fourth quarter gained
92% to $10,481 million.
The Edible Oil Products division
sustained a loss of $10 million in the
year, down sharply from an operating profit of $58 million in fiscal 2006.
For the quarter, Bunge suffered a loss
of $13 million, which compared with
operating income of $8 million in the
same period a year ago. Fourth-quarter results included $29 million of impairment and restructuring charges,
primarily related to the closing of edible oil facilities in Eastern Europe.
Sales in the Edible Oil Products division rose 48% in the year to $5,622 million, and for the fourth quarter were
up 76% to $1,840 million.
Jacqualyn Fouse, chief financial
officer, said Bunge expects 2008 net
income of $830 million to $870 million, representing $6.01 to $6.30 per
share. MBN
bakingbusiness.com / world-grain.com

http://www.mcadowpurc.com http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - February 26, 2008

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