USA – Bunge Global SA recently announced its first quarter 2024 results, revealing a mixed performance across its core segments and significant progress on integration planning for its proposed merger with Viterra, which faces scrutiny in Canada due to potential anti-competitive effects.
In the first quarter, Bunge reported a diluted EPS (Earnings per share) of US$1.68 compared to US$4.15 in the prior year.
The agribusiness segment recorded net sales worth US$9,740,000 for the three months Ending 31 March 2024, a decrease from US$10,852,000 recorded in a similar period in 2023.
The gross profit for the first quarter was US$454,000 almost half of the US$808,000 recorded in the period ending March 31st, 2023.
In the agribusiness segment, higher processing results in Europe and Asia were counterbalanced by lower results in North and South America.
In comparison, merchandising saw lower results due to lower margins in global grains and oils value chains.
The milling segment recorded net sales of US$381,000 lower than the US$515,000 recorded in the first quarter of 2023. Conversely, the gross profit was higher in this first quarter at US$60,000 vs. US$31,000 in 2023’s first quarter.
The segment witnessed higher results in South America, driven by improved margins and a favorable origination market environment.
Greg Heckman, Bunge’s Chief Executive Officer, expressed satisfaction with the results, emphasizing the team’s strong execution despite a more balanced market environment.
“While we are off to a strong start, we continue to have limited visibility into the back half of the year. However, we are confident in our team’s ability to stay agile and capture opportunities ahead of us as we remain focused on delivering on our mission of connecting farmers to consumers to deliver essential food, feed, and fuel to the world,” Heckman commented.
Merger scrutiny in Canada
The Competition Bureau of Canada scrutinizes the proposed merger between Bunge and Viterra.
Bunge and Viterra announced last June that they had agreed to a merger to create one of the world’s largest agribusiness companies, moving it closer in size and scope to leading agribusiness giants Cargill and ADM.
The Bureau expressed concerns about potential anti-competitive effects, particularly in grain purchasing in Western Canada and the sale of canola oil in Eastern Canada.
The report noted that Bunge’s minority stake in G3 Canada could influence economic behavior, raising confidentiality concerns.
Bunge and Viterra issued a joint statement, addressing the Bureau’s concerns and expressing confidence in the transaction’s benefits to Canada. They highlighted their businesses’ complementary nature and commitment to addressing regulatory concerns.
The final decision on the merger will be made by the Governor in Council based on advice from the Minister of Transport. Once further information is provided to address the Bureau’s concerns, regulatory approvals are expected this summer.
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