Bunge: Reports First Quarter Results

White Plains / NY. (bl) High cost inventories and aggressive pricing by competitors pressured fertilizer margins Bunge Limited reported in its statement for the first quarter 2009 results. Soft demand in agribusiness contributed to lower results versus an uncharacteristically strong first quarter in 2008.

Financial Highlights

– Results in millions, except per share data and percentages –

	Q1/2009	Q1/2008	Change
Volumes (metric tons)	32’251	32’251	+02%
Net sales	USD 9’198	USD 12’469	-26%
Total segment EBIT	USD (203)	USD 442	-146%
Agribusiness	USD 18	USD 251	-93%
Fertilizer	USD(262)	USD 133	-297%
Edible Oils	USD 22	USD 51	-57%
Milling products	USD 19	USD 7	+171%
Net (loss) income attributable to Bunge	USD(195)	USD 289	-167%
(Loss) earnings per common share – diluted	USD(1,76)	USD 2,10	-184%

Overview

Alberto Weisser, Bunge´s Chairman and Chief Executive Officer: «The start to 2009 was more challenging than expected. Bunge´s first quarter results reflect this. Retail fertilizer margins in Brazil suffered from aggressive price reductions by competitors, which drove sales prices below international levels. Additionally, global demand for soybean meal was soft. Despite this difficult start, our confidence in a recovery in our markets and a solid performance in the second half of the year remains strong.

We are working through our higher cost fertilizer inventory, and the supply of fertilizer products in the Brazilian retail channel has been reduced by approximately 30 percent since the end of 2008 and is approaching historical seasonal levels. Both of these facts should improve margins as the year progresses.

Higher commodity prices, resulting from tighter global oilseed stocks, are supporting farmer economics, and should help stimulate sales of fertilizer products in the second half of the year when South America enters its next major planting season. Since mid-January, the USDA has reduced its estimate for global soybean production by nearly 15 million metric tons mainly due to weather-related production issues in South America.

Global soybean meal consumption in the first quarter fell by roughly six percent compared to the same period in 2008. While this figure represents a relative improvement over the 9,5 percent year-over-year reduction in the fourth quarter of 2008, consumption was slightly lower than expected. We are, however, seeing signs of stabilization in the poultry and pork industries, and we estimate soybean meal demand for the calendar year to be up about one percent versus 2008.

Periods of lower demand for our core products have historically been short-lived, and the products and services that we and our industry provide are necessary in all types of economic climates. Looking ahead, the world will need good harvests in North America in 2009 and South America in 2010 to alleviate tight agricultural commodity supplies and meet recovering demand. We believe Bunge is well positioned to benefit from these opportunities».

First Quarter Results

Agribusiness: Higher results in grain origination primarily due to strong soybean demand from China were more than offset by lower results in oilseed processing and distribution. Weaker global demand for soybean-based products due to poor economic conditions in end markets and substitution by other agricultural commodity products pressured volumes and margins.

Fertilizer: The operating loss in the quarter was due to lower selling prices, higher raw material and finished product inventory costs due to purchases made last year prior to the drop in international prices and lower sales volumes compared to exceptionally strong volumes in the same period last year. First quarter results included an inventory valuation writedown of 64 million USD.

Edible Oil Products: Results in the quarter declined primarily due to lower margins in Brazil, which resulted from high cost crude vegetable oil inventories purchased prior to price declines, and aggressive product pricing by competitors. Results in Europe, while lower than the first quarter 2008, improved significantly from the low levels seen in the second half of last year as high cost inventory was worked through and price increases in certain markets took hold.

Milling Products: Strong results in the quarter were primarily due to higher volumes in both wheat and corn milling.

Financial Costs: Interest expense decreased in the quarter due to lower average debt levels, primarily resulting from the drop in prices of agricultural commodity inventories which led to lower average working capital needs.

Income Taxes: In the quarter, Bunge had an income tax benefit of 34 million USD compared to a tax expense of 117 million USD in the same period of last year. The tax benefit resulted from the operating loss in the quarter.

Cash Flow: Cash used by operations in the first quarter of 2009 was 363 million USD, driven by losses in the quarter and an increase in working capital resulting mainly from lower accounts payable in the fertilizer business. This compared to cash used by operations in the same period last year of 353 million USD.

Outlook

Jacqualyn Fouse, Chief Financial Officer: «Due to lower than planned first quarter results and a more challenging near term pricing environment in fertilizer, we have revised our 2009 full-year earnings guidance from 6,90 USD to 7,60 USD per share to 4,90 USD to 5,40 USD per share. This guidance assumes an effective tax rate range of 22 percent to 26 percent. This fully diluted per share guidance is based on an estimated weighted average of 138 million shares outstanding, which includes assumed dilution relating to our convertible preference shares».