Agricultural commodities trader Bunge Ltd beat Wall Street estimates for first-quarter profit, helped by strong crush margins in North America and Brazil and high demand for food, feed and biofuels.
Earnings were down from a record first quarter last year due to weaker oilseed processing results in Asia, Europe and drought-hit Argentina and disruptions to grain flows caused by the war in Ukraine.
Bunge reaffirmed its full-year 2023 outlook of adjusted earnings of $11 per share, citing likely weaker results from its Agribusiness and Milling divisions and improved profits in its Refined and Specialty Oils unit.
Bunge and other supply chain middlemen, including Archer-Daniels-Midland Co and Cargill Inc have generally benefited from strong global crop demand and tightening supplies, with record profits last year.
But supply disruptions due to the ongoing war in Ukraine and a severe drought in Argentina have begun to dent earnings for the grains merchants.
The worst drought in decades has slashed grain and soy harvests in Argentina, depriving Bunge of the crops it needs to process.
First-quarter adjusted profit in Bunge's Agribusiness unit, its largest in terms of revenue and volumes, dropped 18% on the year.
Bunge said results were strong in all regions in its Refined & Specialty Oils division, with notable strength in North and South America reflecting favourable food and fuel demand trends.
The company reported adjusted net earnings of $3.26 per share, for the three months ended 31 March, down from a record $4.26 in the same quarter last year but above analysts' average estimate of $3.24 per share, according to Refinitiv data.