Loss mars send-off for longstanding Bunge boss

Bunge announced the retirement of Alberto Weisser, its chief executive, but overshadowed plaudits to his "tremendous contribution" during his 14-year reign by unveiling its biggest quarterly loss as a listed company.

Bunge shares plunged 8.9% to $72.28 in New York, in afternoon deals, wiping more than $1bn from the group's stockmarket value.

The US-based grain trading giant said that Mr Weisser, who retires as chief executive on June 1, but will remain as executive chairman until the end of the year, had guided the group "through one of its most significant and successful eras in its nearly 200-year history".

Since he took the helm in January 1999, Bunge had grown "from a regional operation to a global player", and undertaken a stockmarket flotation which had given its shareholders an average total return on their investment of 16.4% a year.

"Most importantly, however, Alberto helped instil the culture and approach that form the foundation of the company, and developed the talented team that is responsible for its success," Patrick Lupo, the Bunge deputy chairman, said.

Mr Weisser will be succeeded by Soren Schroder, who since joining the group in 2000 has risen to become chief executive of its North America business.

Deep into the red

However, the plaudits for the outgoing boss came as Bunge revealed an after-tax loss of $610m for the October-to-December period, the worst performance in the company's history as a listed group, according to records kept by Reuters, and indeed one of the few quarters in which it has fallen into the red.

The loss reflected $672m in one-time charges, including a writedown of $339m on the value of its sugar operations, which have failed, yet, to fulfil hopes at the time Bunge began ramping up in the sector in late 2009.

The unit slipped back into an operating loss, of $9m, in the latest quarter, from a $51m profit a year before.

Bunge also took a $266m hit on deferred tax allowances, relating to the sale of its Brazilian fertilizer business, and smaller knocks from writing off some of the debt owed to it by Brazilian farmers.

Hedging missteps

But even excluding the one-off charges, Bunge's profitably declined, thanks in part to missteps in its hedging strategy, and despite an 8.6% rise to $17.0bn in revenues for the quarter.

A drop of 17.4% to $362m in gross profit at its core agribusiness division reflected "risk management strategies that were not as profitable as expected", besides the drop in US grain exports evident in weak American corn shipment data.

The fall into the red in sugar was also blamed in part on "risk management strategies that were less effective in the quarter", exposing the division to ethanol and sugar prices down some 20% year on year.

The group also reported lower profits in milling, where weaker corn and rice processing results offset increased profits from the wheat unit, and in fertilizer, leaving the edible oils division the only one to report a rise in profits, fuelled by "higher packaged oil margins in Brazil and Europe".  

The group's fourth quarter was "weaker than expected", Mr Weisser said.

'Better times ahead'

However, Bunge forecast better times ahead in 2013, saying it was well placed to exploit the prospect of strong crops in South America, and the stresses these will place on the region's creaking infrastructure.

"In these environments, the value of our services and network of elevators, processing plants and port terminals increases, as we are able to provide market access for farmers and deliver the right products to customers when and where they are needed," Mr Weisser said.

In sugar, successive years of cane plantings "should allow us to operate our mills at capacity in 2013", of 21m tonnes a year, for the first time, he added.

Drew Burke, the Bunge finance director, forecast a "much improved year in 2013".

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