US agricultural commodities trader Bunge Ltd posted stronger-than-expected fourth-quarter earnings on Wednesday and said its full-year adjusted profit would top estimates due to strong demand and tight commodity supplies.
Shares climbed above $78 in pre-market trading, the highest in nearly three years.
Bunge's fourth-quarter earnings beat, propelled by strong oilseed processing margins and robust North American exports, offered the latest look into how the coronavirus pandemic is impacting the world's largest grain traders.
The company said it expects full-year 2021 adjusted profit of at least $6 per share, higher then estimates of $5.53 per share, but down from the $8.30 per share it earned in 2020.
Despite massive shifts in food and fuel demand as consumers curbed travel and shifted from eating at restaurants to cooking more meals at home, Bunge and rivals ADM, Cargill and Louis Dreyfus, known as the ABCD quartet of grain trading giants, have weathered the pandemic unexpectedly well.
Bunge CEO Greg Heckman called the company's 2020 performance "exceptional," adding "we expect the favorable market environment to continue into 2021, reflecting strong and growing demand, as well as tight supplies."
Grain merchants have thrived despite rising prices for the crops they buy from farmers to store, transport and process amid tightening global supplies and elevated demand from importing countries stockpiling food amid the pandemic.
Bunge noted some headwinds in 2021 for its core agribusiness segment, its largest in terms of revenues and volume, due to expected lower contributions from oilseed processing and origination, particularly in Brazil.
Net income attributable to Bunge stood at $551 million, or $3.74 per share, in the quarter ended Dec. 31, compared with a loss of $51 million, or 48 cents per a share, a year earlier.
Excluding items, Bunge earned $3.05 per share compared to analysts' estimates of $1.82, according to IBES data from Refinitiv.
Revenue jumped nearly 17% to $12.61 billion.
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