US agribusiness company Bunge said it expects third-quarter earnings to increase 40% from last year to US$80m, anticipating a strong performance from its agribusiness, fertiliser and food product divisions. Fourth-quarter earnings are forecast at $55-60m, a prediction that takes into account the company’s acquisition of CEREOL.
The company has not been adversely affected by the fall of the Brazilian real, which has lost over 34% of its value against the dollar. Bunge’s costs in Brazil are priced in reals, but its exports are priced in dollars, so the company has benefited from the real’s fall.
Bunge is the dominant producer in Argentina and Brazil, whose soybean production is expected to exceed that of the US next year. USA is currently the top soybean producer, with Brazil second and Argentina third.
As reported earlier, Bunge is set to complete a deal for the acquisition of rival Cereol of France, thereby becoming the world’s top soybean processor. The US group will buy a 55% stake in Cereol from Edison for €449m ($440.9m), and the remainder from the purchase of publicly traded shares at €32 per share. The purchase also includes the assumption of $764m of Cereol’s debt.