Bunge reported 2015 fourth quarter and full-year results. Q4 adjusted EPS were $1.49, up $0.37 vs. last year. Q4 total adjusted segment EBIT was $337 million.
Article continues below
2015 total adjusted segment EBIT was $1,229 million. Combined Agri-Foods trailing four quarter ROIC of 10%; 3 points over WACC.
CEO Soren Schroder said “In 2015, the Bunge team achieved numerous milestones: record Agribusiness EBIT, four quarter trailing ROIC in our core Agribusiness and Food operations of 10% and approximately $100 million of savings from performance improvement initiatives.
We also executed on our balanced approach to capital allocation, buying back $300 million of common shares, which has continued into 2016 with an additional $100 million of buybacks.
“In the fourth quarter, Bunge managed the challenging market conditions well, leveraging our balanced global footprint to capitalize on good soy processing margins and increased South American grain exports. Food & Ingredients showed slight improvement from the third quarter; however, our Brazilian food businesses continued to struggle in the depressed market environment.
“Our sugarcane milling operation had its strongest quarter of the year, finishing 2015 with positive EBIT and free cash flow.
“Looking to 2016, there are positive signs. Global demand for our core Agribusiness products continues to grow with an increasing percentage of this growth being supplied by South America, which plays into the strength of our footprint.
“Brazil is expected to grow large soy and corn crops supporting good crush and export margins, and improved farmer selling in Argentina will allow us to operate our crushing and port assets at higher utilizations.
“Our food business will continue to grow, benefitting from leaner operations, more focused, consumer-driven innovation and tighter working relationships with key customers. Brazilian ethanol and global sugar prices have both improved.
“These improvements, coupled with stronger agricultural efficiency and lower costs, give us confidence we will experience a solid year in sugarcane milling.
“But challenges are also evident. Conditions will remain difficult for our Brazilian Food & Ingredients businesses. Northern Hemisphere oilseed processing margins and grain exports will be pressured until markets adjust to the increased level of global supplies.
“We have a solid foundation, as evidenced by the recent solidifying of our credit rating to stable BBB/Baa2, and are focused on the right things: standing for safety, driving best in class performance in our operations, improving our winning footprint through incremental additions, and building our valueadded portfolio.
“We will continue to drive our performance improvement initiatives, generating an incremental $125 million of savings in our Agribusiness and Food operations in 2016.
“We expect a challenging year, but ultimately a year of modest earnings growth and ROIC well above WACC in our core Agribusiness and Foods operations.†■