The world's largest processor of soybeans, US company Bunge, said on Tuesday that fourth-quarter net income had more than doubled, reflecting the acquisition of French rival Cereol last year and healthy growth across all its businesses.
Gross profit for the company for the fiscal year 2002 increased by 38 per cent to $1,331 million (€1,236m) and volumes grew by 26 per cent to 90.3 million metric tons.
For the fourth quarter, the agribusiness and food-processing company reported net income of $97 million compared with $48 million a year earlier. Sales surged 48 per cent to $4.68 billion from $3.17 billion.
French company Cereol, acquired by Bunge in October 2002, contributed $7 million to Bunge's agribusiness, edible-oil products and other business segments.
"The acquisition made Bunge the world's leading oilseed processing company and seller of bottled vegetable oils to consumers," said chairman and chief executive Alberto Weisser in the company's statement on Tuesday.
Weisser highlighted the strong growth in the food products area. "We are particularly pleased with the strong results in our food products division, which generated an 85 per cent increase in income from operations.
Cereol's strong position in European edible oils complements the strong performance of Bunge's existing divisions, and provides more balance to our earnings stream."
Gross profit increased by 47 per cent over last year in Bunge's food products division, which consists of edible oil products, wheat milling and bakery products and other (corn products and soy ingredients). Income from operations increased 85 per cent to $89 million. Gross profit and income from operations increased in all business segments. Edible oils and soy ingredients results improved primarily due to the October 2002 acquisition of Cereol.
In the wheat milling and bakery products segment, results improved due to a shift to a higher margin product mix and financial pressures facing competitors in Brazil. In the other segment, corn products profitability improved due to higher margins, and soy ingredients benefited from an increase in export volumes, especially for textured proteins, reported the company.
In addition to Cereol, the chairman gave a special mention to the recent alliance formed between Bunge and Dupont that is aiming to produce and distribute speciality-food ingredients - such as soy proteins and lecithins - and to develop a broader offering of services and products for farmers.
"We are also excited about the strategic alliance with DuPont, which will create a very powerful ingredients business, deepen our relationships with farmers and create new opportunities by giving us access to DuPont's world-class research."
The outlook for 2003?Bill Wells, Bunge's chief financial officer commented on Tuesday : "2003 is beginning well, with a particularly positive start in agribusiness and fertilizer in South America, and a solid performance from food products, led by edible oils worldwide."
But with a note of caution he added that the company plans to idle production at its Cairo, Illinois soy-crushing plant, citing declining demand for domestic soybean meal in the short term and a smaller-than-anticipated US soybean crop."If margins remain weak, further industry cutbacks are possible," added Wells.