By Karl Plume
CHICAGO (Reuters) – Agricultural commodities trader Bunge Ltd reported a first-quarter loss on Wednesday and lowered its full-year forecast as the coronavirus pandemic hammered demand for fuel and upended global food supply chains.
Demand for Bunge’s edible oils business was hurt towards the end of the January-to-March period as the crisis shuttered restaurants and suspended travel, while crashing Brazilian ethanol prices and whipsawing currency markets dented Bunge’s outlook for its sugar and bioenergy unit.
The quarterly results do not yet reflect the more recent oil price crash and its related impact on biofuels pricing.
“We did not experience significant disruptions to our business from COVID-19 in the first quarter, although we did start to see the impact of changing consumer behavior in parts of our edible oils business in March,” Chief Executive Greg Heckman said in a statement, referring to the disease caused by the new coronavirus.
The earnings hit offered the latest glimpse into how the pandemic is impacting global supply chains, from shuttered meat packers and biofuel plants to heightened demand for cardboard shipping boxes and at-home meal ingredients like flour and corn oil.
Bunge forecast a particularly challenging year for its edible oils unit as the pandemic diminishes demand from its restaurant and food service customers. Retail demand for oils from at-home chefs would only partly offset the hit, the company said.
Slumping fuel consumption, including for soybean oil-based biodiesel and corn- and sugar-based ethanol, created further headwinds for Bunge as pandemic lockdowns continue to limit travel.
Rival agribusiness Archer Daniels Midland Co last week highlighted supply-chain disruptions caused by the outbreak after reporting stronger-than-expected quarterly results. Privately held Cargill Inc canceled its most recent earnings release due to the pandemic.
The coronavirus pandemic is the most recent hurdle for two-century-old Bunge following a bruising U.S.-China trade war that reordered global grain flows and a years-long grain glut that depressed crop prices and thinned trading margins.
Under new leadership installed last year, Bunge has been cutting costs and shedding non-core assets to weather a prolonged market downturn that made it a takeover target in 2017 and 2018.
The company last month said it would sell 35 of its U.S. grain elevators to rival Zen-Noh Grain.
St. Louis, Missouri-headquartered Bunge said adjusted loss attributable in the three months ended March 31 was $181 million, compared with a profit of $59 million a year earlier.
On a per-share basis, the company incurred an adjusted loss of $1.34, against a profit of $0.36 a year earlier.
(Additional reporting by Shradha Singh in Bengaluru; Editing by Ramakrishnan M and Bernadette Baum)