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Bunge Ltd. Reports Operating Results (10-Q)

November 06, 2012 | About:
10qk

10qk

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Bunge Ltd. (BG) filed Quarterly Report for the period ended 2012-09-30.

Bunge Ltd has a market cap of $10.24 billion; its shares were traded at around $73.1 with a P/E ratio of 12.5 and P/S ratio of 0.2. The dividend yield of Bunge Ltd stocks is 1.5%.

Highlight of Business Operations:

As of September 30, 2012 and December 31, 2011, $804 million and $716 million, respectively, of receivables sold under the Program were derecognized from Bunges condensed consolidated balance sheets. Proceeds received in cash related to transfers of receivables under the program totaled $9,727 million and $3,755 million for the nine months ended September 30, 2012 and the period from inception of the program (June 1, 2011) through September 30, 2011, respectively. In addition, cash collections from customers on receivables previously sold were $9,886 million and $3,014 million for the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011. As this is a revolving facility, cash collections from customers are reinvested to fund new receivable sales. Gross receivables sold under the program for the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011 were $9,921 million and $2,915 million, respectively. These sales resulted in discounts of $2 million for both the three months ended September 30, 2012 and 2011, respectively, and $6 million and $2 million for the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011, which were included

Segment EBIT decreased by $85 million to a loss of $108 million in the first nine months of 2012 from a loss of $23 million in the first nine months of 2011 primarily due to lower gross profit driven by lower ethanol margins and impairment charges of $39 million related to a North American corn ethanol joint venture.

Segment EBIT increased 28% to $101 million in the nine months ended September 30, 2012 from $79 million in the first nine months of 2011 as a result of the $36 million gain on acquisition of a controlling interest. The impact of the gain was partially offset by lower gross profit and higher SG&A costs, both primarily in wheat milling in Brazil.

Income Tax Expense. In the nine months ended September 30, 2012, we recorded income tax expense of $162 million compared to income tax expense of $62 million in the nine months ended September 30, 2011. The effective tax rate for the nine months ended September 30, 2012 was 20% compared to 8% for the nine months ended September 30, 2011 driven by increased earnings in higher tax jurisdictions and lower financing costs in Brazil. Included in the effective tax rate for the nine months ended September 30, 2012 was $31 million related to the gain on sale of our noncontrolling interest in Solae. Included in the effective tax rate for the nine months ended September 30, 2011 were approximately $21 million of discrete tax charges in the first quarter of 2011 related to certain non-deductible expenses and the provision of a valuation allowance for a subsidiary that management intended to liquidate as part of an internal reorganization.

Cash used for operating activities was $2,872 million for the nine months ended September 30, 2012 compared to cash generated of $1,363 million for the nine months ended September 30, 2011. The cash flow used from operating activities for the nine months ended September 30, 2012 was principally due to higher working capital requirements partially offset by net income. The positive cash flow from operating activities for the nine months ended September 30, 2011 was principally due to net income adjusted for non-cash charges for depreciation and amortization. Operating cash flows in the first nine months of 2011 included by the net proceeds of approximately $716 million from sales of accounts receivables under our new global accounts receivable sale program that we entered into in June 2011. This positive cash flow impact was partially offset by repayment of approximately $500 million of trade accounts payable related to fertilizer imports as we funded fertilizer imports more efficiently through internal sources, and by the payment in September, of approximately $112 million of export tax obligations in Argentina, which had been accrued in prior periods.

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