Global agribusiness giant Bunge reported strong performances for its core agribusiness and food and ingredients businesses in its second quarter 2020 results published on 29 July which showed profit had doubled.
The company’s net income was US$516M in the second quarter ended 30 June, compared with US$214M the previous year.
Higher agribusiness results in the quarter reflected strong execution throughout the value chains, particularly in managing risk, committed crush capacity and global trade flows.
For oilseeds, higher soya processing results were driven by higher margins in South America, Europe and Asia, partially offset by lower margins in North America. Softseed processing results were higher in all regions. Edible oils also performed better than expected.
“Bunge had an outstanding second quarter, with strong performance across all our core businesses while maintaining a sharp focus on the safety of our team,” Bunge CEO Greg Heckman said.
“Our execution against committed crush capacity and coordination of trade flows was exceptional. These results would be strong in any environment, let alone a pandemic.”
In its edible oil products business, Bunge said it had noted a steep drop in service and biofuel demand early in the quarter due to COVID-19 related lockdowns and restrictions.
However, as the quarter developed, refinery margins had improved driven by increased demand from food processor and consumer retail channels along with a partial recovery in food service and biofuel demand. This margin improvement, combined with share growth with new customers and lower costs, had resulted in higher earnings in all regions.
The company said it would be increasing its full-year 2020 earnings per share (EPS) outlook to reflect the stronger than expected second quarter results.
In its agribusiness, based on first half results, the current market environment and forward curves, Bunge expected full year results to be higher than earlier forecasts and up on last year.
For edible oils, the company expected a modest improvement compared to its earlier outlook. However, despite a stronger than second quarter, it was likely the business would continue to be affected by COVID-19.
To date, the company said it had not seen a significant disruption in its supply chain due to COVID-19 and had been able to mitigate any logistics and distribution issues with a result that all of its facilities around the world had continued to operate at or near normal levels.
Bunge said it continued to monitor governmental actions that could limit restrict the movement of agricultural commodities or products or otherwise disrupt physical product flows.
Missouri-headquartered Bunge operates more than 350 port terminals, oilseed processing plants, grain silos, and food and ingredient production and packaging facilities around the world.