|Soren Schroder, Bunge's chief executive officer.|
Net sales, which declined for the eighth straight quarter, were down 2.2% to $10.541 billion from $10.782 billion in the same quarter a year earlier.
Higher Agribusiness results in the quarter were primarily due to improved performances in Grains, which benefited from strong growth in destination volumes and solid risk management, Bunge said. Earnings were up 2.4% from $164 million to $168 million. Increased margins and volumes in Bunge’s South American ports and services operations also contributed to the higher results. Grain origination in Brazil was an important contributor to the quarter. However, results were lower than last year due to slower farmer selling from the combination of market volatility and smaller than expected crops. Origination margins in both Argentina and the U.S. remained soft. Net sales were $7.524 billion, down from $7.744 billion compared to a year earlier.
In Oilseeds, strong meal and oil demand supported soy crush margins in Brazil and the U.S., but were offset by lower results in Argentina crushing and weaker results in oilseed trading and merchandising. Canadian and European soft seed results remained weak, but the outlook for new crop margins improved. Second quarter results included approximately $40 million of mark-to-market hedging gains related to oilseed processing, which are expected to largely reverse in the third quarter when the contracts are executed, Bunge said. Oilseeds earnings for the quarter were down 11% from $63 million to $56 million.
Results in the quarter included a $12 million pre-tax impairment charge related to the remaining unamortized carrying value of certain patents. Results in the second quarter of 2015 included a $30 million pre-tax reversal of an export tax contingency in Argentina.
Milling products results in the quarter were higher ($33 million this quarter vs. $20 million a year earlier) in all regions compared with last year. In Brazil, volumes benefited from the contribution of the company’s Pacifico mill and market share gains. Higher margins were driven by favorable raw material sourcing strategies and improved product mix. In Mexico, higher margins were due to improved sales mix and ongoing improvement initiatives. U.S. corn milling saw higher volumes and reduced industrial costs driven by cost initiatives, which more than offset lower margins. Results in rice milling were similar to the prior year. Net sales were $422 million up from $409 million compared to a year earlier. The milling products segment produced 1.136 billion tonnes, up 14.5% from 992 million tonnes in the same period of last year.
In June, Bunge opened an industrial transshipping complex at the Mykolaiv Sea Port in Ukraine. The company estimates that the new oil recycling plant will be able to process 790,000 tonnes of oilseed annually – that’s 2,400 tonnes of sunflower and 1,700 tonnes of soybeans per day. This means the complex’s reloading capacity is increased by 1.75 million tonnes of grain, meal, and oil every year.
In May, Bunge’s milling segment launched a non-GMO corn product line at its corn mill in Crete, Nebraska, U.S.
|Drew Burke, Bunge’s chief financial officer.|