Reported EPS: $1.48 compared to $1.68 in Q1 2024. Adjusted EPS: $1.81 versus $3.04 in the prior year. Adjusted EBIT: $406 million compared to $719 million last year. Adjusted Funds from Operations: $392 million. Discretionary Cash Flow Available: $338 million after sustaining CapEx. Dividends Paid: $91 million. Growth and Productivity CapEx: $256 million. Cash Proceeds from Asset Sales: $306 million. Retained Cash Flow: Approximately $300 million. Net Debt: RMI exceeded net debt by approximately $3 billion. Adjusted Leverage Ratio: 0.6 times. Liquidity: $8.7 billion in committed credit facilities, all unused, and $3.2 billion cash balance. Adjusted ROIC: 9.4%. ROIC: 8.2%. Full Year 2025 Adjusted EPS Guidance: Approximately $7.75. Capital Expenditures: Expected range of $1.5 billion to $1.7 billion. Net Interest Expense: Expected range of $220 million to $250 million. Depreciation and Amortization: Approximately $490 million.

Warning! GuruFocus has detected 3 Warning Signs with BG.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Bunge Global SA (NYSE:BG) exceeded first-quarter expectations, driven by strategic execution and adaptability in a dynamic market environment. The company reaffirmed its full-year 2025 adjusted EPS guidance of approximately $7.75, indicating confidence in its ability to navigate current market conditions. Bunge Global SA (NYSE:BG) announced the sale of its European Margarines and Spreads business and North American corn milling business, aligning its operations with global value chains. The partnership with Repsol and the incorporation of intermediate novel crops in renewable fuel production in Europe supports Bunge's long-term strategy for lower carbon supply chains. Bunge Global SA (NYSE:BG) maintains a strong liquidity position with committed credit facilities of approximately $8.7 billion and a cash balance of $3.2 billion, providing ample financial flexibility.

Negative Points

First-quarter adjusted EPS was $1.81, down from $3.04 in the prior year, reflecting challenges in the current market environment. Adjusted segment EBIT decreased to $406 million from $719 million last year, with lower results in North America, Argentina, and European soft seeds. The company experienced lower results in ocean freight and a more balanced global supply and demand environment, impacting refined and specialty oils results. Bunge Global SA (NYSE:BG) terminated its share purchase agreement with CJ Selecta due to regulatory approval delays, missing out on a potentially accretive transaction. The company faces uncertainty in US biofuel policies and trade relations, which could impact future earnings and operational strategies.

Story Continues

Q & A Highlights

Q: How confident are you that China will approve the Viterra transaction soon, and what is your backup plan if it doesn't happen? Also, why did the CJ Selecta transaction not go through? A: Gregory Heckman, CEO: We remain confident in the strategic merits of the Viterra transaction and have had constructive interactions with authorities. Timing is uncertain, but we feel positive about the outcome. Regarding CJ Selecta, we passed the long stop date without all regulatory approvals and decided it was best to terminate the agreement. The soy protein concentrate market remains attractive, and we will look for opportunities to expand in Brazil.

Q: Can you break down your processing business margins for US soy and Canadian canola versus the rest of the world? A: Gregory Heckman, CEO: US soy crush margins were slightly lower than last year, with North American soft seed margins significantly lower. Globally, soy margins were strongest in Europe, followed by the US, with weak margins in Argentina. John Neppl, CFO: The spot crush margins are better everywhere, but the outlook is tougher except for North America, where we expect improvement with the new crop.

Q: Could you provide an update on the cadence of earnings for the year, given the Q1 dynamics? A: John Neppl, CFO: The 40-60 split between the first and second half remains unchanged, but Q1 earnings were pulled forward from Q2, resulting in a 60-40 split between Q1 and Q2. We expect some softness in Q2, but the broader first-half, second-half outlook remains the same.

Q: What are your assumptions for US biofuels policy and US-China trade relations in your guidance? A: Gregory Heckman, CEO: Our guidance does not include M&A or share repurchases and assumes current tariff situations and forward curves. We are not making any calls different from market expectations regarding RVO and trade tensions.

Q: What are the strategic benefits of the joint venture with Repsol? A: Gregory Heckman, CEO: The joint venture with Repsol allows us to support their infrastructure investments in lower carbon fuels. We aim to provide a range of lower carbon intensity feedstocks, including novel crops, to help meet their global diesel and SAF process needs. John Neppl, CFO: Europe is committed to biofuels, and partnering with Repsol positions us well to capitalize on this growing opportunity.

Q: How will Bunge benefit if there is a higher revised RVO with stronger biomass diesel volume? A: Gregory Heckman, CEO: A higher RVO would strengthen the oil leg of the crush in North America and globally, benefiting crush margins. John Neppl, CFO: We are not heavily locked for Q3 and Q4, so we are well-positioned to take advantage of any margin improvements.

Q: Do you expect accelerated farmer selling in South America, and what would this mean for global crush margins? A: Gregory Heckman, CEO: We have seen increased farmer selling in Argentina, improving margins. In Brazil, a record soybean crop and a large corn crop are expected, with no take-or-pay agreements this year, which should enhance value chain performance.

Q: What is the timeline for closing the milling business divestiture, and are there any risks? A: John Neppl, CFO: The corn milling business is expected to close by the end of Q2 or early Q3, pending domestic regulatory approval. We do not foresee significant risks.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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