Helped by the strong performance of its core agribusiness segment, Bunge
A look at the numbers
Year-over-year revenues for the quarter surged 32%, from $10.97 billion to $14.48 billion, as supply constraints around the world inflated grain prices. The proof is in companies such as PotashCorp
Foreign exchange gains of $77 million enabled Bunge to post a profit of $316 million this quarter. That figure, however, was down 82% from the year-ago quarter's earnings of $1.77 billion, which got a boost from asset sales of $2.44 billion.
Bunge's total debt increased to $5.02 billion from $3.84 billion a year ago. However, it sports a current ratio of 1.9, and its interest coverage ratio stands at 5.8, so squaring off its short-term debt liabilities shouldn't be a difficulty.
Last time out, analysts pointed to an export ban in Russia for a rise in grain prices. The Black Sea region has played a major part in the global grain trade in recent times, and now that trade has resumed there, agribusiness producers are looking to cash in. Archer Daniels Midland
Bunge appears to be on track with its global expansion plans, as it sees increased earnings from foreign markets in the long run. It recently entered into a deal with SEACOR Holding
The Foolish bottom line
Bunge sees its agribusiness segment driving growth through the year, helped by harvests in the Northern Hemisphere and more emphasis on product in the face of lesser supply. However, it expects its oilseed segment to affect margins as a result of excess processing capacity in South America. Investors should take note.