Andersons, Bunge release financial results

Andersons, Bunge release financial results

Bunge and Andersons reveal solid results for 2013.

GRAIN processing agribusinesses Bunge Ltd. and The Andersons Inc. both recently released strong financial results for the fourth quarter and full year of 2013.

 

Bunge

Bunge reported that on a combined, full-year basis, its agribusiness, edible oils and milling segments generated record results of approximately $1.3 billion in earnings and returns above costs of capital.

Bunge chief executive officer Soren Schroder said the agribusiness team effectively managed risks as markets transitioned from extreme tightness to emerging surpluses while capitalizing on strong oilseed processing margins in the Northern Hemisphere and navigating unpredictable farmer selling patterns.

The company's Food & Ingredients segment achieved record quarterly and full-year results, with all regions reporting higher year-over-year annual earnings.

The Agribusiness segment produced solid earnings of $346 million, more than doubling a challenging year-ago period (Table 1). Higher results in the quarter were primarily driven by strong oilseed processing margins in North America, Europe and China, which benefited from the combination of strong demand, large harvests and a lack of oilseed exports out of South America.

Results in Bunge's Sugar & Bioenergy segment rose the quarter, driven by higher margins and volumes in its trading and merchandising operations and improved performance in the U.S. biofuel business, which benefited from a robust ethanol production environment.

Bunge's sugarcane milling operations in Brazil continued to be affected by depressed global sugar prices, low sucrose cane content and capped ethanol prices in Brazil.

The fourth quarter was the strongest quarter of the year for Bunge's edible oil products as a result of higher margins through improved management of pricing, new product introduction and improved operational efficiency.

Driven by improved performances in corn milling and its Brazilian wheat milling operations, Bunge reported increased results for milling products. Corn milling results benefited from improved margins and higher volumes, which were due, in part, to the U.S. corn harvest and strong demand from customers who had delayed purchases in anticipation of record corn production.

Improved results in the fertilizer port operation in Brazil were partially offset by lower results in Argentina, which were primarily due to lower volumes from a reduction in planted corn and wheat acreage and, thus, levels of fertilization. Overall, the ongoing Fertilizer segment operations continued to deliver returns above the cost of capital while contributing to the integrated agribusiness activities in Brazil, Argentina and Paraguay.

Schroder said 2014 has good momentum due to lower commodity prices, which are spurring growth in demand and trade.

 

Andersons

The Andersons, meanwhile, announced net income of $89.9 million, or $3.18 per share, on $5.6 billion in revenues for the year (Table 2).

The Andersons earned $30.7 million in last quarter of 2013, compared to $15.0 million in the last quarter of 2012.

"I am proud of our 2013 results and the team we have here at The Andersons," stated Mike Anderson, chief executive officer of The Andersons. "The Ethanol Group had exceptional results; they worked to simultaneously optimize margins, yields, production rates and co-product sales."

The Ethanol Group had record operating income of $50.6 million in 2013, compared to a loss of $3.7 million in the prior year. The significant increase in operating income was primarily due to higher ethanol margins, which were affected by solid ethanol export demand and lower corn costs. Total 2013 revenues were $832 million, up from $743 million in 2012.

The Grain Group's 2013 operating income was $46.8 million, compared to $63.6 million in the prior year. The group had considerably lower space income in 2013 as a result of the drought but increased gross profit on sales, primarily due to growth.

Lansing Trade Group contributed significantly to the Grain Group's results. Total revenues for the Grain Group were $3.6 billion, up from $3.3 billion in 2012 due to greater sales volume as average grain prices actually declined.

The Rail Group achieved operating income of $42.8 million both this year and last year. Gross profit from the leasing business was significantly higher than the prior year due to higher lease and utilization rates.

The Plant Nutrient Group finished the year with operating income of $27.3 million on revenues of $709 million, compared with operating income of $39.3 million and revenues of $797 million in 2012. Margins and volume were lower than the prior year due to flat to declining markets, but according to the company, they were still solid.

The Turf & Specialty Group's full-year operating income was a record $4.7 million on revenues of $141 million, compared with operating income of $2.2 million and revenues of $131 million in 2012. The group incurred an operating loss of $1.4 million in the fourth quarter on revenues of $23 million, while the same period in 2012 saw an operating loss of $1.2 million on revenues of $21 million.

The Retail Group had an operating loss of $7.5 million in 2013, which included $4.7 million in one-time costs. In the prior year, the group's operating loss was $4.0 million, which included $1.1 million in one-time expenses.[C1] 

 

1. Bunge fourth-quarter and full-year results, million $

 

-Fourth quarter-

-Full year-

 

2013

2012

2013

2012

Net sales

16,375

17,040

61,347

60,991

Total segment EBIT*

396

(423)

1,329

628

Certain gains (charges)

(8)

(563)

38

(481)

Total segment EBIT, adjusted

404

140

1,291

1,109

Agribusiness

346

134

1,008

1,038

Sugar & Bioenergy

(35)

(49)

(34)

(118)

Food & Ingredients

84

49

280

166

Fertilizer

9

6

37

23

*Earnings before interest and tax.

 

2. The Andersons fourth-quarter and full-year results, million $

 

-Fourth quarter-

-Full year-

 

2013

2012

2013

2012

Sales and merchandising revenues

1,584.3

1,680.6

5,604.6

5,272.0

Cost of sales and merchandising revenues

1,474.7

1,589.5

5,239.4

4,914.0

Gross profit

109.6

91.2

365.2

358.0

Net income

34,619

14.2

95.7

75.6

Net income (loss) attributable to non-controlling interests

4.0

(0.8)

5.8

(3.9)

Net income attributable to The Andersons

30.7

15.0

89.9

79.5

Earnings attributable to The Andersons ($)

1.08

0.53

3.18

2.82

 

Volume:86 Issue:10

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