Bunge sees 18% profit dip but stays on track for full-year goals
Despite the earnings slide, CFO John Neppl noted that the altered quarterly cadence would not change the company’s full-year guidance
USA – Agribusiness giant Bunge Global SA reported an 18% decline in net income for the first quarter of its 2025 fiscal year, falling to US$201 million, or US$1.48 per share, compared with US$244 million, or US$1.68 per share, in the same period a year ago.
Despite the year-over-year decrease, the company exceeded Wall Street expectations, thanks largely to a late-quarter boost spurred by shifts in global trade dynamics and anticipatory buying by farmers and consumers reacting to regulatory and tariff uncertainties.
Net sales fell 13% to US$11.64 billion, down from US$13.42 billion in the first quarter of fiscal 2024.
Adjusted net earnings, which exclude acquisition and integration costs as well as mark-to-market adjustments, came in at US$244 million, or US$1.81 per share, well ahead of analysts’ average forecast of US$1.27 per share.
The strong adjusted result was largely due to a pull-forward of demand into the first quarter from the second, as stakeholders attempted to get ahead of possible regulatory changes.
“First quarter exceeded our expectations, driven in part by some pull-forward of activity from Q2 into Q1,” CEO Gregory Heckman told analysts on a May 7 earnings call.
“Shifts in trade dynamics, including tariff and regulatory uncertainty, prompted some farmers and consumers to act ahead of potential changes,” he added.
Still, Bunge’s individual business segments posted weaker results across the board compared to last year, reflecting the broader macroeconomic headwinds and normalizing market conditions. In its core Agribusiness segment, adjusted segment EBIT dropped 45% to US$268 million from US$487 million a year earlier.
Net sales declined 16% to US$8.16 billion, and volumes fell by 9.5% to 18.3 million tonnes. The Refined and Specialty Oils unit saw EBIT fall 40% year-over-year to US$123 million, with sales down 4.5% to US$3.09 billion.
Volumes for the segment slipped 3% to 2.13 million tonnes. Bunge’s Milling division also recorded a 46% decrease in EBIT, dropping to US$15 million, despite a 2.7% increase in volumes to 898,000 tonnes. Sales dipped slightly to US$375 million from US$381 million in Q1 2024.
Across all segments, adjusted total segment EBIT was US$362 million, down sharply from US$676 million a year ago.
Despite the earnings slide, CFO John Neppl noted that the altered quarterly cadence would not change the company’s full-year guidance. He explained that about half of the outperformance in Q1 had originally been forecast for Q2, essentially flipping the expected earnings distribution between the two quarters.
“Instead of 40/60, it looks to be more 60/40,” Neppl said. “We’re looking at maybe 62/38, if I wanted to put a really fine point on it, from Q1 to Q2. But the broader first half/second half is the same outlook as we had last quarter.”
Bunge reaffirmed its full-year adjusted earnings per share forecast of US$7.75 for fiscal 2025, a projection it had revised downward from US$8.71 in the previous quarter. That figure excludes the financial impact of several major acquisitions and divestitures expected to close during the year.
Strategic positioning
Among its strategic initiatives, Bunge is nearing completion of its US$18 billion acquisition of Rotterdam-based Viterra, which is owned by Glencore. Heckman said that while regulatory approvals have taken longer than initially anticipated, the company remains confident that the deal will close in the near term.
“We continue to believe in the strategic merits of our planned combination with Viterra and expect to close the transaction in very short order once received,” he said.
In addition to its acquisition drive, Bunge is also divesting non-core assets and strengthening its focus on higher-margin opportunities. The company has agreed to sell its North American dry corn milling business to US-based flour miller Grain Craft and its European margarines and spreads business to Belgian food company Vandemoortele.
It has also partnered with Spanish energy firm Repsol on the use of intermediate novel crops in renewable fuel production across Europe.
In a separate strategic move, Bunge recently terminated its planned acquisition of Brazilian soy processor CJ Selecta. The decision, Heckman explained, followed a review of the company’s priorities, but he reaffirmed Bunge’s interest in the soy protein concentrate segment for feed, which he described as a market with attractive long-term potential and a strong fit with Bunge’s crushing operations in Brazil.
Outlook
Looking ahead, the company expects slightly weaker full-year results for its Agribusiness segment due to margin compression in processing.
The Refined and Specialty Oils division is projected to maintain a steady outlook but see softer year-over-year results, mainly due to a more balanced supply and demand landscape in North America. The Milling segment, however, is expected to improve compared to 2024, in line with earlier forecasts.
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