White Plains-based Bunge Ltd, an integrated, global agribusiness and food giant, has reported record Q1 2002 net income of US$22m, or US$.26/share, representing a 267% increase over net income of US$6m, or US$.09/share, in the same quarter of 2001.

For the Q1 2002, compared to the same period last year:

* Volumes grew 6% to 14.6 million metric tons
* Gross profit increased 18% to US$184m
* Financial costs(1) declined US$61m
* Net income from continuing operations before minority interest was up US$55-56m

Sales volumes and gross profit exceeded last year in Bunge's agribusiness, fertilizer and food products businesses, producing a strong result in a seasonally weak quarter. Income from operations in the Q1 2002 decreased by US$6m to US$68m year on year. Income from operations in the Q1 2001 benefited from non-recurring credits of US$14m relating to Brazilian social health and welfare taxes. Excluding these non-recurring credits, income from operations would have increased 13%, on a comparative basis versus 2001.

The Q1 2002 benefited from a US$61m reduction in financial costs, reflecting lower borrowing levels, lower interest rates, a more stable real in Brazil and the positive impacts of the capital restructuring programs initiated in 2000 and completed in 2001. Foreign exchange exposure in Argentina was well hedged, which minimized the impact from that country's recent currency devaluation.

Commenting on the results, Alberto Weisser, chairman and CEO, stated: "We were pleased with our strong performance in the Q1 2002. Gross profit margins in our US agribusiness operations were solid. Our fertilizer segment particularly benefited from a strong performance by Fosfertil, as a result of an improved product mix and operational cost reductions. Results in our food products division benefited from improvements in our wheat and corn milling businesses."

Weisser continued: "In March 2002, we successfully raised net proceeds of US$292m in a public offering by selling 16,093,633 additional shares of common stock. We used US$105m of the proceeds to buy back shares held by minority shareholders in connection with our corporate restructuring in Brazil. As a result, our ownership in our primary Brazilian subsidiaries increased from 71% to 83%. The remainder of the proceeds was used to reduce our short-term borrowings."

Agribusiness

Sales volumes increased 4% and gross profit increased 12% over the same period last year in Bunge's agribusiness division, reflecting the continued growth of Bunge's international marketing operations. Oilseed processing results were particularly strong in the US, reflecting strong volumes and solid margins. Grain origination sales volumes declined as low commodity prices made for reluctant farmer selling. Income from operations for the Q1 2002 decreased 11% to US$31m. Income from operations in the Q1 2001 benefited from non-recurring credits of US$2m relating to Brazilian social health and welfare taxes. The Q1 2002 included US$3m of additional provisions for doubtful accounts. Excluding these items, income from operations in the Q1 2002, on a comparative basis versus 2001, would have increased 3%.

Fertilizers

Sales volumes increased 16% and gross profit increased 42% over the same period last year in Bunge's fertilizer business. This quarter benefited from a large second crop and cost reductions in Fosfertil. Income from operations for the Q1 2002 increased 12% to US$29m. Income from operations in the first quarter of 2001 benefited from non-recurring credits of US$8m relating to Brazilian social health and welfare taxes. Excluding this non-recurring item, income from operations in the Q1 2002, on a comparative basis versus 2001, would have increased 61%. The quarter also benefited from one extra month of results from Fosfertil, which had been reporting its results one month in arrears. We were able to eliminate this lag through Fosfertil's ongoing integration into our operations. The extra month of results from Fosfertil increased net income by US$2m for the Q1 2002.

Food products

Sales volumes increased 20% and gross profit increased 8% over the same period last year in Bunge's food products division. Wheat milling results improved due to a shift to a higher margin product mix and financial pressures facing domestic competitors. In the corn products business, volumes increased over last year and margins were solid. Income from operations for the Q1 2002 decreased 12% to US$15m. Income from operations in the Q1 2001 benefited from non-recurring credits of US$4m relating to Brazilian social health and welfare taxes. Excluding those non-recurring credits, income from operations in the Q1 2002, on a comparative basis versus 2001, would have increased 15%.

Non-operating income (expense)

Non-operating income (expense) net decreased, primarily due to significantly lower foreign exchange losses and net interest expense. Net income in the Q1 2002 was affected by a US$12m tax credit relating to the refund of prior years' US Foreign Sales Corporation benefits. In addition, we recorded a goodwill impairment charge of US$14m, net of tax, as a cumulative effect of a change in accounting principle, resulting from the adoption of SFAS No. 142, Goodwill and Other Intangibles, relating to our bakery products business. SFAS No. 142 changes the accounting for goodwill by eliminating the amortization of goodwill. Net income for the Q1 2001 would have been US$8m, or US$0.12/share, if adjustments were made to exclude goodwill amortization of US$2m, net of tax.

Outlook

Bill Wells, CFO, stated: "In our agribusiness division, we see strong domestic demand in Brazil and US with weaker demand in Europe and delayed purchases of beans by China. Overall, we believe that demand growth will be slightly below normal trend lines in 2002 after a very strong 2001.

In our fertilizer division, we are expecting demand to return to historical trends and margins to be stable.

In our food products division, we expect solid performance from wheat and corn milling and ingredients with a slow recovery for edible oils.

We are projecting our 2002 Q2 net income to be within a range of US$25m to US$30m, or US$.25 to US$.30/share, compared to a Q2 of 2001 net income of US$23m. This represents a 20% increase in net income at the mid-point of the projection range."