REUTERS — Bunge missed Wall Street expectations for second-quarter profit late last month as narrower processing margins hurt the grain trader.
Ample global supplies of soybeans and corn are keeping crop prices near four-year lows and discouraging farmers from selling their harvests, squeezing global traders and oilseed processors.
Adjusted earnings in Bunge’s agribusiness segment, its largest by revenue and volume, in the April-June quarter fell 55 per cent from a year ago to $298 million. Its processing business suffered as higher results in European soy crushings were offset by lower results in North and South America and Asia.
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In the merchandising business, which includes grain trading and purchasing, quarterly adjusted earnings sank by 78 per cent from last year to $33 million.
“Lower results were primarily driven by global grains, where higher volumes were more than offset by lower margins,” Bunge said.
The company still raised its full-year adjusted profit forecast to $9.25 per share from $9 per share and said market conditions have improved in some regions.
It posted an adjusted profit of $1.73 per share for the quarter, compared with analysts’ estimates of $1.80 per share.
Top soy importer China is facing an oversupply of soybeans at a time when animal-feed demand remains subdued. The soybean surplus also threatens to curb China’s appetite for imports in the September-December period, the peak marketing season for U.S. soybeans.
Separately, Bunge said that integration plans are progressing for its proposed $34 billion merger with Viterra.
The deal is heading toward conditional European Union antitrust approval, a person with direct knowledge of the matter.
