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Introduction & Market Context
Bunge Limited (NYSE:BG) reported a significant year-over-year decline in its first-quarter 2025 earnings on May 7, with adjusted earnings per share falling 40% compared to the same period last year. Despite the weaker results, the global agribusiness and food company maintained its full-year 2025 earnings guidance and highlighted progress on strategic initiatives, including the pending Viterra transaction.
Bunge shares were trading at $80.37 in premarket activity, up 2.83% from the previous close of $78.16, suggesting investors may be focusing on the company’s maintained guidance and strategic positioning rather than the quarterly results.
Quarterly Performance Highlights
Bunge reported adjusted earnings per share of $1.81 for Q1 2025, down from $3.04 in Q1 2024, representing a 40% decline. Adjusted Total (EPA:TTEF) EBIT (Earnings Before Interest and Taxes) fell to $362 million from $676 million in the prior-year period, a 46% decrease.
As shown in the following detailed earnings highlights table, all of Bunge’s major business segments experienced significant year-over-year declines in profitability:
The company’s Agribusiness segment, which includes oilseed processing and grain merchandising, saw EBIT decline to $268 million from $487 million in Q1 2024. Refined and Specialty Oils EBIT fell to $123 million from $204 million, while Milling EBIT decreased to $15 million from $28 million.
Bunge attributed the earnings decline to a "more balanced supply and demand environment" in global agricultural markets, as illustrated in the following multi-year earnings trend chart:
The chart shows a clear downward trajectory in both Adjusted Total EBIT and Adjusted EPS since 2023, with Q1 2025 trailing twelve months (TTM) figures continuing this trend. Adjusted Total EBIT has declined from a peak of $3,031 million in 2023 to $1,703 million for the Q1 2025 TTM period, while Adjusted EPS has fallen from $13.66 to $7.96 over the same timeframe.
Strategic Initiatives
Despite the earnings pressure, Bunge highlighted several strategic actions that are reshaping its portfolio. The company stated it is ready to close the Viterra transaction once final regulatory approval is received, a combination that management believes will "further strengthen our capabilities and the resiliency of the global food supply chain."
Additionally, Bunge announced it had exercised its contractual right to terminate the previously announced CJ Selecta acquisition. The company also disclosed agreements to sell its U.S. corn milling and European margarines businesses, and confirmed the closing of its previously announced joint venture with Repsol (OTC:REPYY).
These portfolio actions generated $306 million in cash flow during the quarter, contributing to the company’s overall financial flexibility as shown in the following cash flow allocation chart:
Financial Position & Liquidity
Bunge emphasized its strong financial position, with readily marketable inventory (RMI) exceeding net debt by $3.0 billion at the end of Q1 2025. The company reported an adjusted leverage ratio of 0.6x, indicating conservative financial leverage.
As illustrated in the following chart tracking RMI and net debt over the past five quarters, Bunge has consistently maintained RMI above net debt levels:
The company also highlighted its robust liquidity position, with a cash balance of approximately $3.2 billion and no outstanding amounts under its $2 billion commercial paper program. Additionally, Bunge has secured $5.8 billion of term loan commitments available to draw at the Viterra closing.
The following reconciliation shows how Bunge calculates its adjusted leverage ratio, which remains well below industry averages:
Forward-Looking Statements
Despite the weaker Q1 results, Bunge maintained its full-year 2025 adjusted EPS forecast of approximately $7.75. The company provided the following segment outlook for the remainder of the year:
Bunge expects Agribusiness results to be down compared to 2024 and below its prior outlook. Refined and Specialty Oils are projected to be down versus 2024 but in line with prior guidance. Milling is expected to be up compared to 2024 and in line with previous outlook. Corporate and Other expenses are anticipated to be favorable versus 2024 and more favorable than prior outlook.
The company also updated its financial projections, lowering its expected net interest expense range to $220-250 million from the previous $250-280 million. Capital expenditures are projected to be in the range of $1.5-1.7 billion, with depreciation and amortization of approximately $490 million.
Executive Commentary
In the presentation’s closing remarks, Bunge management emphasized that the company remains "focused on what we can control" and described the business as "resilient with strong track record of execution and delivering value to farmers and end consumers."
The company’s cash flow generation capabilities remain strong despite the earnings decline, as shown in the following discretionary cash flow trend chart:
While discretionary cash flow has declined from $1,978 million in 2023 to $1,156 million for the Q1 2025 TTM period, it continues to exceed the company’s cost of equity, providing flexibility for reinvestment and shareholder returns.
As Bunge navigates a more challenging market environment, investors will be watching closely to see if the company can deliver on its maintained full-year guidance and successfully complete the strategic Viterra transaction, which management views as transformative for the company’s long-term competitive positioning.
Full presentation:
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