Bunge Limited (NYSE:BG) today reported fourth quarter and full-year 2020 results.

• Full-year GAAP EPS of $7.71 vs. $(9.34) in the prior year; $8.30 vs. $4.76 on an adjusted basis excluding certain gains and charges and mark-to-market timing differences
• Q4 GAAP EPS of $3.74 vs. $(0.48) in the prior year; $3.05 vs. $1.69 on an adjusted basis excluding certain gains and charges and mark-to-market timing differences
• Excellent execution throughout the value chains drove higher Q4 and full year results in Agribusiness and Edible Oils
• Full year adjusted funds from operations of ~$1.9 billion, up ~$800 million vs. 2019
• Favorable market environment continuing into 2021

Greg Heckman, Bunge’s Chief Executive Officer, commented, “Our performance in 2020 was exceptional reflecting the earnings strength of our platform. Our talented team and new operating model allowed us to capture the upside from market opportunities and deepen customer partnerships. We delivered these strong results while completing the portfolio actions we originally identified, sharpening our financial discipline, and, importantly, keeping the focus on protecting the safety of our team during these unprecedented times.

“Looking ahead, we expect the favorable market environment to continue into 2021, reflecting strong and growing demand, as well as tight supplies. We are excited about our momentum and the opportunities ahead of us,” Mr. Heckman continued. “I am extremely proud of our team across all the businesses as we execute our strategy and deliver value to all our stakeholders.”

In Oilseeds, higher results were primarily driven by softseed processing where earnings were higher in all regions supported by strong vegetable oil demand. Soy processing results were in line with the prior year as improvements in North America and Asia were offset by South America and Europe. 

In Grains, higher results were primarily driven by our North American operations, which benefited from strong export demand and execution. Results also benefited from favorable risk management and optimization in our global trading and distribution business. In South America, earnings decreased largely due to lower origination volumes as farmers had accelerated sales earlier in the year.

Edible Oil Products Summary

The strong performance in the quarter was primarily driven by higher margins in our consumer business in Brazil as a result of tight supply and strong demand. Higher results in North America were largely due to increased demand from the renewable diesel sector. Results were also higher in Asia driven by lower costs. Earnings declined in Europe primarily due to lower margins.

Milling Products Summary

Lower results in the quarter were driven by North America, which was impacted by lower volumes and margins, as well as a loss of earnings from our rice milling operation that was sold during the quarter. Results in South America were comparable with last year as higher volumes were offset by lower margins.

Fertilizer Summary

Fertilizer results in the quarter were comparable to the prior year.

Other

Corporate and Other Summary

Total adjusted EBIT for Corporate and Other was comprised of $(81) million from Corporate and $2 million from Other. This compares to $(95) million from Corporate and $(60) million from Other for the prior year period. The decrease in Corporate expenses during the quarter primarily related to the timing of recognition of performance-based compensation in prior year. The increase in Other reflects the prior year impact of our investment in Beyond Meat.

Sugar & Bioenergy Summary

Segment results for this quarter reflected our share of the results of the 50/50 joint venture with BP. By contrast, most of fourth quarter 2019 reflected our 100 percent ownership of the Brazilian sugar and bioenergy operations that we contributed to the joint venture in December 2019.

Results in the quarter benefited from higher year-over-year average ethanol prices in local currency, as well as improved industrial efficiency. Earnings in the fourth quarter of last year benefited from lower depreciation due to our Brazilian sugar and bioenergy operations being classified as held for sale. 

Cash used for operations during the year was $3,536 million compared to cash used of $808 million in the same period last year. Adjusted for the proceeds from beneficial interest in securitized trade receivables, cash used by operating activities was $1,593 million compared with cash provided by operating activities of $504 million in the prior year. This increase in cash used for operations was primarily driven by higher working capital levels, reflecting higher commodity prices and increased purchases of readily marketable inventory. Funds from operations adjusted for notable items and mark-to-market timing differences was $1,886 million compared to $1,096 million in the prior year.

Income Taxes

For the three and twelve months ended December 31, 2020, income tax expense was $97 million and $248 million, respectively, compared to $16 million and $86 million, respectively, for the three and twelve months ended December 31, 2019. The increase in income tax expense during 2020 is primarily due to higher pre-tax income in 2020. Adjusting for notable items, the effective tax rate for the twelve months ended December 31, 2020 was 16.5%. The lower than expected tax rate was primarily due to favorable earnings mix.

Bunge continues to take proactive steps to protect the health and safety of its employees, their families and the communities in which it operates. Through an internal task force, the Company closely monitors developments related to the pandemic and provides guidance to its facilities worldwide. Each of Bunge’s facilities around the globe is taking steps to respond to COVID-19 based on the nature of its operations and the guidelines from and actions taken by local governments. The Company has continued to restrict travel, follow upgraded cleaning practices at its facilities and offices, require remote work arrangements for teammates wherever possible, reduce staffing in its production and other facilities and offices and keep social distancing and other safety related measures in place.

Numerous countries around the globe, including places where Bunge operates production facilities or maintains offices, have continued to impose quarantines and significant restrictions, including shelter-in-place or stay-at-home orders. Additionally, the rise in the number of observed COVID-19 cases in many parts of the world may lead to governments re-imposing travel and work restrictions or imposing additional restrictions. In locations where such restrictions are in place, Bunge has been deemed an essential or life-sustaining operation. To date, the Company has not seen a significant disruption in its supply chain, has been able to mitigate logistics and distribution issues that have arisen, and substantially all of its facilities around the world have continued to operate at or near normal levels. Bunge continues to monitor local, regional and national governmental actions that could limit or restrict the movement of agricultural commodities or products or otherwise disrupt physical product flows or its ability to operate in the future.

Taking into account the current margin environment and forward curves, we expect full-year 2021 adjusted EPS of at least $6 per share, which would materially exceed our previously stated $5 EPS baseline.

In Agribusiness, full-year results are expected to be down from 2020, primarily driven by lower contributions from oilseed processing and origination, particularly in Brazil. While we are not forecasting the same unique environment or magnitude of opportunities that we captured during 2020, we do see some potential upside to our outlook resulting from strong demand and tight commodity supplies.

In Edible Oils, full-year results are expected to be comparable to last year. Higher results expected in our North American business, driven by a recovery in foodservice and increased renewable diesel demand, will be offset by expected lower results in our consumer business in Brazil.

In Milling, full-year results are expected to be in line with last year. In Fertilizer, full-year results are expected to be down from a strong prior year.

Additionally, the Company expects the following for 2021: an adjusted annual effective tax rate in the range of 20% to 22%; net interest expense in the range of $230 million to $240 million; capital expenditures in the range of $425 to $475 million; and depreciation and amortization of approximately $415 million.

In Non-Core, full-year results in the sugar and bioenergy joint venture are expected to be a positive contributor, driven by improved sugar and Brazilian ethanol prices.

Bunge Limited’s management will host a conference call at 8:00 a.m. Eastern (7:00 a.m. Central) on Wednesday, February 10, 2021 to discuss the company’s results.

Additionally, a slide presentation to accompany the discussion of results will be posted on www.bunge.com.

To listen to the call, please dial 1 (844) 735-3666. If you are located outside the United States or Canada, dial +1 (412) 317-5706. Please dial in five to 10 minutes before the scheduled start time. The call will also be webcast live at www.bunge.com.

To access the webcast, go to “Events and presentations” in the “Investors” section of the company’s website. Select “Q4 2020 Bunge Limited Conference Call” and follow the prompts. Please go to the website at least 15 minutes prior to the call to register and download any necessary audio software.

A replay of the call will be available later in the day on February 10, 2021, continuing through March 10, 2021. To listen to it, please dial 1 (877) 344-7529 in the United States, 1 (855) 669-9658 in Canada, or +1 (412) 317-0088 in other locations. When prompted, enter confirmation code 10151151. A replay will also be available in "Past events" at "Events and presentations" in the "Investors" section of the company's website.

At Bunge, our purpose is to connect farmers to consumers to deliver essential food, feed and fuel to the world. With more than two centuries of experience, unmatched global scale and deeply rooted relationships, we work to put quality food on the table, increase sustainability where we operate, strengthen global food security, and help communities prosper. As the world’s leader in oilseed processing and a leading producer and supplier of specialty plant-based oils and fats, we value our partnerships with farmers to improve the productivity and environmental efficiency of agriculture across our value chains and to bring quality products from where they’re grown to where they’re consumed. At the same time, we collaborate with our customers to create and reimagine the future of food, developing tailored and innovative solutions to meet evolving dietary needs and trends in every part of the world. Our Company is headquartered in St. Louis, Missouri, and we have more than 23,000 dedicated employees working across more than 350 facilities located in more than 40 countries.

We routinely post important information for investors on our website, www.bunge.com, in the "Investors" section. We may use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

This press release contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward looking statements are not based on historical facts, but rather reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward looking statements by using words including “may,” “will,” “should,” “could,” “expect,” “anticipate,” “believe,” “plan,” “intend,” “estimate,” “continue” and similar expressions. These forward looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward looking statements. These factors include the risks, uncertainties, trends and other factors described in our Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) and include: industry conditions, including fluctuations in supply, demand and prices for agricultural commodities and other raw materials and products used in our business, fluctuations in energy and freight costs; competitive developments in our industries; the effects of weather conditions and the outbreak of crop and animal disease on our business; global and regional economic, agricultural, financial and commodities market, political, social and health conditions; the impacts of pandemic outbreaks, including COVID-19; the outcome of pending regulatory and legal proceedings; our ability to complete, integrate and benefit from acquisitions, dispositions, joint ventures and strategic alliances; our ability to achieve the efficiencies, savings and other benefits anticipated from our cost reduction, margin improvement, operational excellence and other business optimization initiatives; changes in government policies, laws and regulations affecting our business, including agricultural and trade policies and environmental, tax and biofuels regulation; our capital allocation plans, funding needs and financing sources; changes in foreign exchange policy or rates; the outcome of our portfolio rationalization initiatives; the effectiveness of our risk management strategies; our ability to attract and retain executive management and key personnel; operational risks, including industrial accidents, natural disasters and cybersecurity incidents; and other factors affecting our business generally. The forward-looking statements included in this release are made only as of the date of this release, and except as otherwise required by federal securities law, we do not have any obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.