Sign in

    Bunge Global SA (BG)

    Q1 2024 Earnings Summary

    Reported on Jan 10, 2025 (Before Market Open)
    Pre-Earnings Price$109.62Last close (Apr 23, 2024)
    Post-Earnings Price$105.00Open (Apr 24, 2024)
    Price Change
    $-4.62(-4.21%)

    What went well

    • Bunge is maintaining its full-year adjusted EPS guidance of approximately $9, demonstrating confidence in future performance despite limited visibility into the back half of the year.
    • Bunge repurchased $400 million of its shares in Q1, making meaningful progress against its $1 billion repurchase plan and showing commitment to returning value to shareholders.
    • The company is scaling up its winter canola program, which has shown promising results in trials and could contribute positively to future growth and profitability.

    What went wrong

    • Expected softness in Q2 in key segments like processing and merchandising, potentially leading to earnings weakness.
    • Reduced visibility beyond 3 months due to uncertainties in farmer behavior, crop outcomes, and consumer trends, making future performance less predictable.
    • Elevated capital expenditures with major projects not contributing to financials until 2026, possibly straining finances without near-term benefits.

    Q&A Summary

    1. Viterra Acquisition & Regulatory Hurdles
      Q: Any updates on Viterra deal and Canada's concerns?
      A: Management is pleased with progress; 28 out of 40 jurisdictions have given unconditional clearances. In Canada, while concerns were raised, they see no material risk to the deal's economics and believe no remedies are needed.

    2. Yearly Guidance & Outlook
      Q: Is the outlook weaker, and any changes to guidance?
      A: They maintain the yearly outlook of approximately $9 EPS, expecting a 50-50 split between first and second half. Q2 will be softer due to stronger Q1, but full-year view is unchanged.

    3. Share Repurchase Plans
      Q: Will you adjust buyback timing given progress?
      A: Possible to pull forward the $2 billion buyback, depending on Viterra transaction timing and target leverage ratios. They will continue to watch opportunities closely.

    4. Second Half Visibility
      Q: How is visibility into the back half of the year?
      A: Visibility is limited beyond three months due to balanced markets. Clarity will improve with crop progress and farmer behaviors in North and South America.

    5. Crush Margins Outlook
      Q: What's your view on global crush margins?
      A: U.S. margins are okay but weaker into Q2 and Q3; improving in Q4. Argentina margins expected to pick up later in the year. Soybean meal demand appears good due to lower prices and stable animal numbers.

    6. Renewable Diesel Demand
      Q: How is renewable diesel demand affecting oils?
      A: RD margins are softer due to low CI feedstock imports, notably UCO from Asia. Despite this, 1.4 billion gallons of capacity is coming online in '24, with demand increasing later in the year.

    7. Capital Expenditures & Projects
      Q: Can you update on major CapEx projects?
      A: Key projects include Destrehan expansion, Morristown SPC plant, and a greenfield plant in Amsterdam, all underway and expected online by late 2026. They remain optimistic about progress.

    8. Soybean Oil Exports
      Q: Will U.S. export more soybean oil this year?
      A: U.S. can switch quickly to export as needed. With tight vegetable oil supplies globally and strong demand in India, they see potential opportunities.

    9. Crush Capacity Expansions
      Q: Are new crush plants at risk due to margins?
      A: Some projects in early stages are on hold due to compressed margins. Management is cautious about standalone plants but confident in their strategic expansions.

    10. Cover Crop Development
      Q: When will cover crops impact financials?
      A: Successful winter canola trials are scaling up, but it's too early to discuss financial impacts. These programs support future expansions like Destrehan.

    Related Publications