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Commodities

Bunge Sees Profits Shrinking as Trade War Adds Uncertainty

Steven Hansen, managing director and equity analyst at Raymond James, talks about the forecast for the agriculture industry in 2025.

(Bloomberg) -- Bunge Global SA expects profits this year to shrink to the lowest level since before the pandemic as Donald Trump’s trade war adds to uncertainty weighing on crop markets. 

The company projects full-year adjusted earnings of $7.75 a share in 2025, down 16% from last year and below the average of analyst estimates compiled by Bloomberg, according to a statement Wednesday. The figure, which excludes the pending acquisition of Glencore Plc-backed Viterra, would be the lowest since 2019.

Bunge shares fell 5.1% as of 9:35 a.m. in New York trading.

The profits companies such as Bunge make from trading and processing soybeans into meal and oil have been under pressure due to increased supplies and persistent lack of clarity on the rules around tax credits for renewable diesel production in the US. The outlook this year has also been clouded by the prospect of a trade war as President Donald Trump pushes for tariffs including against China.

“We definitely are in an environment that has less visibility than normal with the trade disruptions and some of the uncertainty around US biofuels,” Chief Executive Officer Greg Heckman said during a call with analysts. 

Heckman said its proposed combination with Viterra will boost Bunge’s ability to navigate any trade disruptions by increasing the company’s ability to source crops globally. The $8 billion deal, which last month won approval by Canadian regulators, is still pending a green light from China. 

Bunge has held “constructive” conversations with Chinese authorities and expects to close the transaction “soon,” Heckman added. The conclusion of the deal originally was expected for the middle of 2024.

Adjusted earnings were $2.13 a share for the three months ended December, down 42% from a year earlier. That’s below the average of analyst estimates compiled by Bloomberg, and the lowest fourth-quarter result since 2019.

(Updates with details throughout)

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