Bunge Limited (BG) has reported a 50.63 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $118 million, or $0.83 a share in the quarter, compared with $239 million, or $1.56 a share for the same period last year.
Revenue during the quarter grew 6.14 percent to $11,423 million from $10,762 million in the previous year period. Gross margin for the quarter contracted 206 basis points over the previous year period to 4.87 percent. Total expenses were 97.97 percent of quarterly revenues, up from 95.97 percent for the same period last year. That has resulted in a contraction of 200 basis points in operating margin to 2.03 percent.
Soren Schroder, Bunge's chief executive officer, stated, "Challenging market conditions and slow farmer selling led to a lower than expected quarter in Agribusiness. However, performance improvement efforts and better pricing drove higher results in Food & Ingredients and Sugar & Bioenergy. Year to date, we have delivered over $90 million of cost and efficiency benefits toward our full-year target of $125 million. We are also taking important steps to execute our strategy and for 2017 see strong growth potential in our Agribusiness, Foods and Sugar Milling businesses."
Operating cash flow improves
Bunge Limited has generated cash of $635 million from operating activities during the nine month period, up 20.49 percent or $108 million, when compared with the last year period.
The company has spent $667 million cash to meet investing activities during the nine month period as against cash outgo of $311 million in the last year period.
The company has spent $102 million cash to carry out financing activities during the nine month period as against cash outgo of $185 million in the last year period.
Cash and cash equivalents stood at $297 million as on Sep. 30, 2016, down 1.98 percent or $6 million from $303 million on Sep. 30, 2015.
Working capital increases
Bunge Limited has recorded an increase in the working capital over the last year. It stood at $3,642 million as at Sep. 30, 2016, up 9.17 percent or $306 million from $3,336 million on Sep. 30, 2015. Current ratio was at 1.44 as on Sep. 30, 2016, up from 1.41 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 9 days for the quarter from 33 days for the last year period. Days sales outstanding went down to 15 days for the quarter compared with 16 days for the same period last year.
Days inventory outstanding has decreased to 22 days for the quarter compared with 48 days for the previous year period. At the same time, days payable outstanding went down to 28 days for the quarter from 31 for the same period last year.
Debt increases substantially
Bunge Limited has witnessed an increase in total debt over the last one year. It stood at $5,402 million as on Sep. 30, 2016, up 27.71 percent or $1,172 million from $4,230 million on Sep. 30, 2015. Total debt was 26.95 percent of total assets as on Sep. 30, 2016, compared with 22.94 percent on Sep. 30, 2015. Debt to equity ratio was at 0.74 as on Sep. 30, 2016, up from 0.64 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 3.18 for the quarter from 5.64 for the same period last year.
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