Bunge to Explore Options for Sugarcane Milling Unit After Loss
The third-quarter loss before interest and tax at the company’s sugar and bioenergy unit widened to $19 million from $8 million a year earlier, White Plains, New York-based Bunge said today in a statement.
Bunge, which bought its first sugar mills in Brazil in 2007, said it will crush 19 million metric tons of cane this year, compared with a capacity of 21 million tons. While it still expects the segment to be profitable in 2014, Bunge said an earlier goal of earnings before interest and tax of $8 to $10 per ton will now be difficult to achieve without changes in Brazilian fuel-pricing policy.
The Brazilian sugar-milling operations “continued to face suboptimal weather and low global sugar prices, as well as the structural headwinds of domestic cost inflation and capped ethanol prices,” Chief Executive Officer Soren Schroder said in the statement. “These conditions make it difficult for the sector to generate consistent profit and appropriate returns.”
The company’s third-quarter net loss was 94 cents a share, compared with year-earlier net income of $1.92. Earnings from adjusted continuing operations were $2.05 a share, trailing the $2.23 average of 14 analysts’ estimates compiled by Bloomberg. Sales dropped 11 percent to $14.7 billion, missing the $16.9 billion average estimate.
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