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Bunge Global Completes Sale of Its 50% Stake in BP Bunge Bioenergia
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Bunge Global SA (BG - Free Report) has completed the sale of its 50% share in BP Bunge Bioenergia to its joint venture partner BP plc (BP - Free Report) . This strategic move marks Bunge Global’s exit from the bioenergy and sugarcane ethanol business in Brazil, which will enable it to shift focus back to its core operations.
Background of BP Bunge Bioenergia
Bunge Global and BP created the joint venture, BP Bunge Bioenergia, in 2019 by merging the two companies' Brazilian bioenergy and sugarcane ethanol businesses. The joint venture operates 11 mills in the Southeast, North and Midwest areas of Brazil.
In June 2024, Bunge Global signed a deal with BP to sell its 50% share in the business for $800 million as it was considered non-core to its business. Now that the sale has been completed, BP is the sole owner of BP Bunge Bioenergia. The transaction will enable Bunge Global to strengthen its balance sheet.
A Quick Look at BG’s Q2 Results and FY24 Outlook
Bunge Global reported second-quarter 2024 adjusted earnings of $1.73 per share, which missed the Zacks Consensus Estimate of $1.79. The bottom line slumped 53% year over year. Net sales were $13.2 billion, down 12% from the year-ago quarter. The top line missed the consensus estimate of $13.69 billion.
The second-quarter performance reflected lower Agribusiness results. In Processing, net sales decreased 15% due to lower average sales prices experienced in all regions for BG’s global soybean oilseed processing businesses as well as in the Europe softseed businesses. This was somewhat offset by higher volumes, driven by increased activity in the Europe softseed business.
In Merchandising, net sales increased 1% due to higher volumes on fewer supply constraints compared with the prior-year quarter in the global corn, wheat and oils businesses. This increase was offset by lower average sales prices in global corn, wheat and oils businesses.
Due to this performance, Bunge Global expects adjusted earnings per share to be approximately $9.25 in 2024, which indicates a 32% decline from 2023.
Bunge-Viterra Combination Progressing Well
The Bunge Viterra merger, announced in June 2023, is progressing smoothly. It was unanimously approved by the boards of directors of both Bunge Global and Viterra and BG’s shareholders have voted in favor of the deal.
Viterra operates a network of agricultural storage, processing and transport assets across 37 countries. The combined entity will boast an enhanced global network with a diversified agriculture network covering all major crops.
The combination of Bunge Global and Viterra’s highly complementary asset footprints and distribution network will connect the world’s largest production regions to areas of the fastest-growing demand. This will enhance the geographical balance and adaptability of the global value chains. A diversified global mix of earnings across processing, handling and merchandising, and value-added products will lead to solid cash flow generation.
Along with increasing operational efficiency, the combination will further enhance Bunge Global’s innovation know-how. This will equip the company to address the pressing needs of food security, efficiency for end-customers, market access for farmers, and sustainable food, feed and renewable fuel production.
Additionally, the combination is expected to benefit from significant incremental network synergies across joint commercial excellence opportunities, vertical integration efficiencies and improved logistics optimization and trading optionality from a larger and broader network.
BG Stock’s Price Performance
Shares of Bunge Global have declined 7.6% over the past year against the industry's 8% growth.
Image Source: Zacks Investment Research
BG’s Zacks Rank & Stocks to Consider
Bunge Global currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 145% in a year.
The Zacks Consensus Estimate for Idaho Strategic Resources’ fiscal 2024 earnings is pegged at 72 cents per share. The consensus estimate for earnings has moved up 167% in the past 60 days. It has an average trailing four-quarter earnings surprise of 116.6%. IDR’s shares have soared 241% in a year.
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Bunge Global Completes Sale of Its 50% Stake in BP Bunge Bioenergia
Bunge Global SA (BG - Free Report) has completed the sale of its 50% share in BP Bunge Bioenergia to its joint venture partner BP plc (BP - Free Report) . This strategic move marks Bunge Global’s exit from the bioenergy and sugarcane ethanol business in Brazil, which will enable it to shift focus back to its core operations.
Background of BP Bunge Bioenergia
Bunge Global and BP created the joint venture, BP Bunge Bioenergia, in 2019 by merging the two companies' Brazilian bioenergy and sugarcane ethanol businesses. The joint venture operates 11 mills in the Southeast, North and Midwest areas of Brazil.
In June 2024, Bunge Global signed a deal with BP to sell its 50% share in the business for $800 million as it was considered non-core to its business. Now that the sale has been completed, BP is the sole owner of BP Bunge Bioenergia. The transaction will enable Bunge Global to strengthen its balance sheet.
A Quick Look at BG’s Q2 Results and FY24 Outlook
Bunge Global reported second-quarter 2024 adjusted earnings of $1.73 per share, which missed the Zacks Consensus Estimate of $1.79. The bottom line slumped 53% year over year. Net sales were $13.2 billion, down 12% from the year-ago quarter. The top line missed the consensus estimate of $13.69 billion.
The second-quarter performance reflected lower Agribusiness results. In Processing, net sales decreased 15% due to lower average sales prices experienced in all regions for BG’s global soybean oilseed processing businesses as well as in the Europe softseed businesses. This was somewhat offset by higher volumes, driven by increased activity in the Europe softseed business.
In Merchandising, net sales increased 1% due to higher volumes on fewer supply constraints compared with the prior-year quarter in the global corn, wheat and oils businesses. This increase was offset by lower average sales prices in global corn, wheat and oils businesses.
Due to this performance, Bunge Global expects adjusted earnings per share to be approximately $9.25 in 2024, which indicates a 32% decline from 2023.
Bunge-Viterra Combination Progressing Well
The Bunge Viterra merger, announced in June 2023, is progressing smoothly. It was unanimously approved by the boards of directors of both Bunge Global and Viterra and BG’s shareholders have voted in favor of the deal.
Viterra operates a network of agricultural storage, processing and transport assets across 37 countries. The combined entity will boast an enhanced global network with a diversified agriculture network covering all major crops.
The combination of Bunge Global and Viterra’s highly complementary asset footprints and distribution network will connect the world’s largest production regions to areas of the fastest-growing demand. This will enhance the geographical balance and adaptability of the global value chains. A diversified global mix of earnings across processing, handling and merchandising, and value-added products will lead to solid cash flow generation.
Along with increasing operational efficiency, the combination will further enhance Bunge Global’s innovation know-how. This will equip the company to address the pressing needs of food security, efficiency for end-customers, market access for farmers, and sustainable food, feed and renewable fuel production.
Additionally, the combination is expected to benefit from significant incremental network synergies across joint commercial excellence opportunities, vertical integration efficiencies and improved logistics optimization and trading optionality from a larger and broader network.
BG Stock’s Price Performance
Shares of Bunge Global have declined 7.6% over the past year against the industry's 8% growth.
Image Source: Zacks Investment Research
BG’s Zacks Rank & Stocks to Consider
Bunge Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) and Idaho Strategic Resources (IDR - Free Report) . Both stocks sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 145% in a year.
The Zacks Consensus Estimate for Idaho Strategic Resources’ fiscal 2024 earnings is pegged at 72 cents per share. The consensus estimate for earnings has moved up 167% in the past 60 days. It has an average trailing four-quarter earnings surprise of 116.6%. IDR’s shares have soared 241% in a year.