Bunge Global SA — Q1 2024 Form 10-Q
Business context and reporting period. This unaudited quarterly report covers the three months ended March 31, 2024, compared with Q1 2023. Bunge operates in agribusiness, refined and specialty oils, milling, and sugar and bioenergy. Amounts below are in U.S. dollars; financial statement figures are in millions unless stated otherwise.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net sales | $13,417 | $15,328 |
| Gross profit / gross margin | $876 / 6.5% | $1,181 / 7.7% |
| Net income attributable to Bunge | $244 | $632 |
| Diluted EPS | $1.68 | $4.15 |
| Total Segment EBIT (non-GAAP) | $433 | $886 |
| Cash provided by operating activities | $994 | $931 |
| Cash used for investing activities | $396 | $—; cash provided was $45 |
| Cash used for financing activities | $259 | Cash provided was $901 |
Sales fell 12%; gross profit declined 26%, and net income attributable to Bunge fell 61%. The company reported a $78 million net foreign-exchange loss versus a $49 million gain a year earlier. SG&A increased to $439 million from $353 million, including $61 million of Viterra acquisition and integration costs. Income tax expense was $117 million, down from $183 million; management cited lower pretax income, partly offset by unfavorable discrete tax adjustments. Interest expense was $108 million versus $112 million.
Segment EBIT: Agribusiness $278 million (down from $705 million); Refined and Specialty Oils $226 million (down from $233 million); Milling $33 million (up from $9 million); Sugar and Bioenergy $24 million (up from $19 million); Corporate and Other loss $128 million (versus a loss of $80 million). Agribusiness processing margins and foreign-exchange results weakened; merchandising results improved. Milling benefited from higher gross profit, while Sugar and Bioenergy benefited from its BP Bunge Bioenergia investment.
Balance sheet at March 31, 2024: Cash and cash equivalents were $2.939 billion; total debt was $5.095 billion, including $1.010 billion of short-term debt and $4.079 billion of long-term debt. Debt rose $213 million from year-end 2023, mainly due to short-term local bank borrowing for working capital, but was $625 million below March 2023. Working capital was $8.311 billion and the current ratio was 1.99, compared with $8.663 billion and 2.13 at December 31, 2023. Total equity was $11.528 billion.
Operating cash flow increased $63 million year over year, principally due to working-capital changes, partly offset by lower earnings. Investing outflows included $236 million of capital expenditures and $351 million of investment payments, partly offset by $239 million of investment proceeds. Financing included $400 million of share repurchases and $95 million of dividends. Cash and restricted cash increased $330 million during the quarter.
Material changes, outlook, and risks
- Lower commodity selling prices contributed to lower reported sales across major businesses; Bunge also reported higher Agribusiness volumes. Management attributed lower Agribusiness processing EBIT mainly to weaker soybean processing margins and foreign-exchange results, partly offset by stronger merchandising results.
- The proposed Viterra acquisition remained pending at the filing date, with closing anticipated as early as mid-2024 subject to regulatory approvals and customary conditions. Consideration was estimated at approximately $6.7 billion in Bunge shares and $2.0 billion in cash, with final share consideration value dependent on Bunge’s share price at closing. Bunge secured $8.0 billion of acquisition financing. A $400 million termination fee may apply in specified antitrust-clearance failure circumstances.
- Bunge entered into new revolving credit arrangements in March. At quarter-end, it reported $5.665 billion of unused and available committed borrowing capacity; $3.0 billion of incremental commitments were conditional on Viterra closing. An April 12, 2024 amendment extended the maturity of a $1.1 billion 364-day facility to April 2025. These are subsequent or conditional financing developments, not quarter-end borrowings.
- Bunge agreed to sell 40% of its Spanish subsidiary Bunge Iberica to Repsol for $300 million plus up to $40 million in contingent payments, subject to adjustments and closing conditions; closing was expected in late 2024. It also expected the CJ Latam/Selecta acquisition to close as early as mid-2024, subject to conditions.
- Key exposures include commodity prices, foreign exchange, interest rates, freight, energy costs, weather, geopolitical events, counterparty performance, and seasonality. A 100-basis-point change in reference rates was estimated to change interest expense on variable-rate debt by approximately $53 million. Commodity and derivatives fair values can add earnings volatility.
- Management did not expect pending litigation and claims, net of reserves, to materially affect financial condition, results, or liquidity, but noted inherent uncertainty. Recorded provisions for non-income tax, labor, and civil/other claims totaled $196 million. Separately, asserted Brazilian ICMS and PIS/COFINS claims totaled $624 million; the filing says these are being evaluated and recognized if and when loss is considered probable. Guarantees had $720 million of maximum potential future payments and $9 million recorded liability.
- The filing provides no specific earnings or financial guidance. Management stated Q1 results are not necessarily indicative of full-year results. Disclosure controls were assessed as effective at the reasonable assurance level.
Most important facts for investors to verify
- Whether and when Viterra receives required approvals and closes, the final transaction consideration, integration costs, and financing/debt implications.
- Whether operating margins recover, particularly in Agribusiness processing, and how commodity prices, volumes, and foreign-exchange movements affect segment EBIT.
- Short-term borrowing needs, liquidity availability, and the impact of acquisition financing on leverage, credit ratings, and covenant headroom.
- The status and potential outcomes of Brazilian tax claims, other litigation, guarantees, and the CJ and Bunge Iberica transactions.
- Cash-flow sustainability: Q1 operating cash flow benefited from working-capital movements, while commodity prices, harvest timing, and derivative margin requirements can cause substantial variability.