Bunge followed rival Archer Daniels Midland in raising its earnings guidance, putting year-on-year growth on the cards, after an oilseeds boost from both refined oils and soybean processing margins.
The agricultural trading giant said that it was raising to “at least $13.50 per share”, from “at least $12 per share”, its forecast for adjusted full year earnings in 2022. This was the third upgrade to the company’s guidance, which started off at “at least $9.50 per share”.
The latest revision, which would take the result above the $12.94-per-share result reported for last year, reflected “the current environment” as well as the group’s results for the July-to-September quarter, for which Bunge unveiled earnings per share of $3.45.
While down year on year, that figure beat Wall Street expectations of a $2.49-per-share result.
Bunge’s full-year forecast is also ahead of investor forecasts, which show a consensus of $12.74, according to Refinitiv.
The company’s shares gained 6.3% to $97.80 in morning deals in New York.
The group reported underlying growth of 6.0% to $740m in underlying operating profit in its core ag businesses, led by a 37% surge to $195m in the refined and specialty oils division.
Bunge reported “strong performances” in Europe, North America and South America in its refined oil operations, which convert crude oils such as palm, coconut and shea into higher-grade products used largely as food ingredients.
In the key processing division – which crushes the likes of rapeseed and soybeans into livestock feed ingredients and lower-grade oils for use in the likes of biodiesel and cooking oil – operations in the Americas achieved growth too.
However, the improvement was “largely offset by lower results in Europe”, where margins felt a squeeze from higher energy costs, which have soared in the region particularly following the invasion of Ukraine by Russia, the world’s top gas exporter.
With Chinese crush results depressed too by the dent to demand stemming from continued Covid lockdowns, the processing division reported operating profits for the quarter flat at $420m.
Other divisions reported declines in underlying operating profits, with the grain-centred merchandising unit recording an easing of 5.3% to $108m, and the milling result down 26% at $17m.
Meanwhile, Bunge’s sugar joint venture with BP recorded a halving in operating profits to $24m, “primarily driven by the combination of lower ethanol volumes and increased costs”, with the outlook for its full-year results looking less promising too.
However, the group said that prospects for its merchandising-processing and refined and specialty oils operations had improved over the last three months, backing the upgrade to the full-year results forecast.