New York-based agribusiness and food company Bunge expects sequential earnings improvement in the fourth quarter that will spur momentum heading into 2018. The acquisition of Loders Croklaan announced in September is expected to be closed within the first half of the next calendar year, allowing expedited growth in innovation and higher margin value-added products moving forward.
Company chief executive Soren Schroder stated the company anticipates reaching its $15 million-dollar overhead cost savings target for 2017, introduced as part of its Competitiveness Program that aims to reduce overhead by $250 million by 2019.
Bunge reported a total segment EBIT of $175 million during the third quarter of 2017, an 18% fall YoY. Compressed results in the agribusiness segment as well as Sugar and Bioenergy contributed to the reduced figure, coming on the back of subpar distribution margins in soy and depressed Brazilian ethanol prices.
Consequently, Schroder announced a roll back in annual segment EBIT target ranges for both areas, reducing agribusiness to $425-$500mn and Sugar and Bioenergy to $45-$55mn.
Gross profits for the company’s Milling segment in the quarter totaled $59mn, representing a 34% decrease from Q3 2016 results. In fertilizer, the company reported decreased earnings even though costs went down; attributing the bearish movements to competition in its Argentine market from cheaper international imports.
The company’s edible oil segment was a positive note in the quarter, reporting gross profits of $125mn to account for a gain of 0.06% YoY.