Agricultural commodities trader Bunge Ltd BG.N raised its 2020 outlook after reporting a 91% jump in adjusted third-quarter profit on Wednesday as strong soy processing margins and robust demand for soy products boosted its core agribusiness segment.
Bunge shares rose almost 7% to their highest level in more than a year.
The company raised full-year profit guidance for a second straight quarter, projecting 2020 earnings of $6.25 to $6.75 per share. The company cited better-than-anticipated agribusiness results and a more favorable outlook for its edible oils unit despite the ongoing coronavirus pandemic.
"In our view, the team's execution was nearly flawless this quarter," said Chief Executive Greg Heckman, adding that guidance was lifted "based on Q3 results and improving market trends."
Grain traders like Bunge and rivals Archer Daniels Midland, Cargill and Louis Dreyfus, known as the ABCDs of grain, have faced headwinds from the pandemic as shuttered restaurants and reduced travel disrupted demand for food and fuel. Infection rates are rising again globally, triggering fresh lockdowns and other restrictions.
But they have weathered the crisis better than other industries, and Bunge said its facilities continued to operate at or near normal levels.
Bunge agribusiness earnings more than doubled to $467 million on robust margins in South America, Europe and Asia and active grain sales by South American farmers. Edible oils performed better than expected, although results were down year-on-year.
Net attributable income to Bunge was $262 million, or $1.84 per share, for the third-quarter ended Sept. 30, compared with a loss of $1.49 billion, or $10.57 per share, a year earlier when Bunge took charges totaling about $1.7 billion.
On an adjusted basis, Bunge posted a profit of $2.47 per share, up from $1.28 per share a year earlier.
Net sales fell 1.6% to $10.16 billion, but topped analysts' estimates of $9.92 billion, according to Refinitiv IBES.
(Reporting by Karl Plume in Chicago and Arunima Kumar in Bengaluru; Editing by Shailesh Kuber and Nick Zieminski) ((karl.plume@thomsonreuters.com; +1 313 484 5285; Reuters Messaging: karl.plume.thomsonreuters.com@reuters.net))
