White Plains, N.Y.-Bunge Ltd. said last week that the performance of its Brazilian retail business was weaker than expected during the second quarter due to the combination of aggressive competitor pricing, which pressured margins, and disruption resulting from the sale of the company’s nutrient business to Vale S.A., which resulted in higher operating costs and lost sales opportunities. The second quarter also included a charge of $37 million recorded in cost of goods sold related to an inventory valuation adjustment as a consequence of the sale to Vale. Bunge reported a $2.44 billion gain on the sale to Vale. Second-quarter fertilizer gross losses were $11 million on sales of $641 million, versus the year-ago loss of $212 million on sales of $841 million. Sales volumes were off 19 percent, to 1.96 million mt from the year-ago 2.43 million mt. For the first six months, fertilizer saw $50 million in gross margins on sales of $1.34 billion, versus the year-ago loss of $405 million on sales of $1.54 billion. Volumes were off 5 percent, to 4.26 million mt from the year-ago 4.49 million mt. Going forward, Bunge expects improvement, as fertilizer sales should pick up closer to planting. Regardless, the company is reducing full-year company-wide guidance to $3.25-$3.50 per share, down from April’s guidance of $5.30-$5.80. Bunge-wide, second-quarter net income was $1.79 billion ($11.15 per share) on sales of $10.97 billion, versus the year-ago $322 million ($2.28 per share) on sales of $10.99 billion. Six-month net income was $1.87 billion ($11.67 per share) on sales of $21.32 billion, versus the year-ago $146 million ($.64 per share) on sales of $20.19 billion.
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