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Agriculture

UPDATE 3-Bunge Q4 profit tops expectations on strong demand, forecasts solid 2021

(Adds CEO quote, updates share price)

Feb 10 (Reuters) - U.S. agricultural commodities trader Bunge Ltd posted stronger-than-expected fourth-quarter earnings on Wednesday and said its full-year adjusted profit would top estimates due to strong demand and tight commodity supplies.

Shares climbed to $76.45 in early trading, the highest in nearly three years.

Bunge’s fourth-quarter earnings, propelled by strong oilseed processing margins and robust North American exports, offered the latest look into how the coronavirus pandemic is impacting the world’s largest grain traders.

The company said it expects full-year 2021 adjusted profit of at least $6 per share, higher then estimates of $5.53 per share, but down from the $8.30 per share it earned in 2020.

Despite massive shifts in food and fuel demand as consumers curbed travel and shifted from eating at restaurants to cooking more meals at home, Bunge and rivals ADM, Cargill and Louis Dreyfus, known as the ABCD quartet of grain trading giants, have weathered the pandemic unexpectedly well.

Grain merchants have thrived despite as tightening global supplies stoked elevated demand from importing countries stockpiling food amid the pandemic.

Bunge Chief Executive Greg Heckman called the company’s 2020 performance “exceptional” and that momentum has carried into 2021. Tighter crop supplies and higher prices, however, clouded the forecast for late 2021.

“These balance sheets are really tightened up in the last year, and they’re going to stay that way,” Heckman said during a call with analysts.

“It would be hard to recreate for everything to happen the way it did in 2020. But I’ll tell you, we’re optimistic.”

Net income attributable to Bunge stood at $551 million, or $3.74 per share, in the quarter ended Dec. 31, compared with a loss of $51 million, or 48 cents per a share, a year earlier.

Excluding items, Bunge earned $3.05 per share compared to analysts’ estimates of $1.82, according to IBES data from Refinitiv.

Revenue jumped nearly 17% to $12.61 billion. (Reporting by Karl Plume in Chicago and Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi, Chizu Nomiyama and Marguerita Choy)

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