Bunge Limited (NYSE:BG) Q3 2024 Earnings Call Transcript

Bunge Limited (NYSE:BG) Q3 2024 Earnings Call Transcript October 30, 2024

Bunge Limited beats earnings expectations. Reported EPS is $2.29, expectations were $2.15.

Operator: Good day and welcome to the Bunge Global SA third quarter 2024 earnings release and conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ruth Ann Wisener. Please go ahead.

Ruth Ann Wisener: Thank you Operator, and thank you for joining us this morning for our third quarter earnings call. Before we get started, I want to let you know that we have slides to accompany our discussion. These can be found at the Investor Center on our website at bunge.com under Events and Presentations. Reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures are posted on our website as well. I’d like to direct you to Slide 2 and remind you that today’s presentation includes forward-looking statements that reflect Bunge’s current view with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties.

Bunge has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review these factors. On the call this morning are Greg Heckman, Bunge’s Chief Executive Officer, and John Neppl, Chief Financial Officer. I’ll now turn the call over to Greg.

Greg Heckman: Thank you Ruth Ann, and good morning everyone. Our team delivered a strong third quarter thanks to their ability to react quickly to shifting market dynamics to capture opportunities as they emerge. Our focused approach to leveraging our global platform enabled us to serve our customers at both ends of the value chain, farmers and consumers. We’re making great progress on integration planning for our announced combination with Viterra. The teams are working well together, confirming our confidence that we will be more complete as one combined company. Their commitment will ensure that we can effectively serve our customers from day one. We also continued to engage with the relevant authorities as we work towards gaining a few remaining regulatory approvals.

Since our last call, we received conditional clearance from the European Commission and we’re well through the process of meeting the conditions. Conversations in other jurisdictions are constructive. We do not see any issues that would materially impact the economics of the deal. We expect to close the transaction later this year or early 2025. In addition to progressing on the Viterra transaction, we also completed other strategic priorities, including closing the sale of our interest in our non-core sugar and bio-energy joint venture in Brazil to our partner, BP. Turning to our results, we delivered another quarter of solid adjusted EBIT. We exceeded our expectations for the quarter. Great execution by the team led to stronger results in our core segments.

Similar to the second quarter, we saw shifting margin environments across the globe with improved margins in some regions offsetting more muted conditions in others. Since we reported the second quarter, we’ve repurchased $200 million of Bunge shares, making progress against the repurchase plan we outlined following the announcement of the Viterra transaction. Looking ahead, many of the same market dynamics remain in place, which we expect to continue for the rest of the year. Based on what we see in the markets and the forward curves today, we now expect full year adjusted EPS to be at least $9.25. With that, I’ll turn it over to John for a deeper look at our financials and outlook. John?

John Neppl: Thanks Greg and good morning everyone. Let’s turn to the earnings highlights on Slide 5. Reported third quarter earnings per share was $1.56 compared to $2.47 in the third quarter of 2023. Reported results included an unfavorable mark-to-market timing difference of $0.16 per share and negative impact of $0.57 per share primarily related to transaction and integration costs associated with our announced business combination with Viterra. Adjusted EPS was $2.29 in the third quarter versus $2.99 in the prior year. Adjusted core segment earnings before interest and taxes, or EBIT was $561 million in the quarter versus $735 million last year. In agribusiness, processing results of $291 million in the quarter were down from last year as higher results in South American and European soy crush were more than offset by lower results in North America, European soft seeds, and Asia.

In merchandising, higher results were driven by improved performance in our financial services, ocean freight and global oils businesses, more than offsetting lower results in global grades. Refined and specialty oils performed well but down from a strong prior year as higher results in Asia were more than offset by lower results in North and South America. Results in Europe were in line with last year. In milling, slightly higher results in North America were more than offset by lower results in South America, where higher raw materials costs pressured margins. Corporate and other improved from last year. The decrease in corporate expenses was primarily driven by a lower performance-based compensation. Other results were largely related to Bunge Ventures and our captive insurance programs.

In our non-core sugar and bio-energy joint venture, higher sugar and ethanol volumes were more than offset by higher operating costs and lower ethanol prices. Lower results also reflected foreign exchange translation losses on U.S. dollar-denominated debt in the quarter compared to translation gains in the prior year. The first nine months of the year reported income tax expense was $236 million compared to $495 million in the prior year. The increase was primarily due to lower pre-tax income. Net interest expense of $94 million in the quarter was in line with last year. Let’s turn to Slide 6, where you can see our adjusted EPS and EBIT trends over the past four years, along with the trailing 12 months. The strong performance over the period reflects a combination of favorable market environment and excellent execution by our team.

The recent trend reflects more balanced and less volatile markets translating into lower earnings. Slide 7 details our capital allocation. Year to date, we generated approximately $1.3 billion of adjusted funds from operations. After allocating $295 million to sustaining capex, which includes maintenance and environmental health and safety, we have $988 million of discretionary cash flow available. Of this amount, we paid $287 million in dividends, invested $592 million in growth and productivity-related capex, about two thirds of which relates to our large multi-year greenfield investments, and repurchased $600 million of Bunge shares. This resulted in a use of $491 million of previously retained cash flow. Based on our current progress on our greenfield projects, we now expect that we will end the year toward the higher end of the capex range of $1.2 billion to $1.4 billion, or slightly above.

Moving to Slide 8, at quarter end readily marketable inventories, or RMI exceeded our net debt by approximately $2.8 billion. Our adjusted leverage ratio, which reflects our adjusted net debt to adjusted EBITDA, was 0.5 times at the end of the quarter. Slide 9 highlights our liquidity position. At quarter end, we had committed credit facilities of approximately $8.7 billion, all of which was unused at the end of the quarter, providing us ample liquidity to manage our ongoing capital needs. In addition, we had a cash balance of $2.8 billion accumulated in large part as a result of $2 billion in cash proceeds from the U.S. public debt offering that we closed in September. These amounts in addition to $6 billion in term loan commitments that we had secured last year will be used to fund the Viterra transaction.

Please turn to Slide 10. The trailing 12 months adjusted ROIC was 13.8%, well above our RMI adjusted weighted average cost of capital of 7.7%. OIC was 11.3%. While returns have declined from recent highs, they remain well above our weighted average cost of capital of 7%. Moving to Slide 11, in the trailing 12 months, we produced discretionary cash flow of approximately $1.4 billion and a cash flow yield of 12.3% compared to our cost of equity of 8.2%. Please turn to Slide 12 and our 2024 outlook. As Greg mentioned in his remarks, taking into account year-to-date results, the current margin environment forward curves and the loss of income due to the sale of our ownership in the sugar JV, we now expect full year 2024 adjusted EPS to be at least $9.25.

In agribusiness, full year results are forecasted to be up from our previous outlook, reflecting a better than expected third quarter but down compared to last year. Refined and specialty oils full year results are expected to be up from our previous outlook but down compared to last year’s record performance. In milling, full year results are expected to be down from our previous outlook, reflecting the lower than expected third quarter but up from last year. In corporate and other, full year results are expected to be similar to our previous outlook. In non-core, full year results are expected to be down considerably from our previous outlook due to the lower than expected third quarter and the loss of income from the sale of our ownership in the sugar JV, which closed on October 1.

Additionally, the company currently expects the following for 2024: adjusted annual effective tax rate in the range of 22% to 24%, net interest expense in the range of $285 million to $305 million, capital expenditures in the upper end of the range of $1.2 billion to $1.4 billion, and depreciation and amortization of approximately $450 million. With that, I’ll turn things back over to Greg for some closing comments.

Greg Heckman: Thanks John. Before turning to Q&A, I wanted to offer a few closing thoughts. Looking ahead, what impresses me most is our team’s commitment to day-to-day execution, along with continuous improvement. We’ve done a lot of hard work to strengthen our business and operations so that we can continue to provide quality products and services to our customers at both ends of the value chain. We’re always looking for additional opportunities to get better. We’ve spent significant capital improving the facilities and operations across our outstanding global footprint, and our team is making sure those investments pay off in improved efficiency and reliability. For instance, our U.S. plants had the best soy crush performance for a crop year ever, and we continue to run at high utilization rates.

We also reached year-to-date record volumes in global rapeseed crushing and refining. In the quarter, we broke ground on an expansion of our palm and specialty oils facility in Avondale, Louisiana that we purchased last year. This facility, which has multi-oil capabilities, builds on our ability to provide specialty oils to our food customers in North America and is already exceeding our initial performance expectations. We’re excited to further grow our operations in this location that has significantly improved our reach across North America In today’s often complicated global environment, strengthening all areas of our business is more important than ever. Our combination with Viterra will further accelerate our diversification across assets, geographies and crops, providing us with more optionality to help address the world’s food security needs.

While we always look for opportunities to improve, we are well positioned to deliver on our critical mission of connecting farmers to consumers to deliver essential food, feed and fuel to the world. With that, we’ll turn to Q&A.

Q&A Session

Operator: Thank you. We will now begin the question and answer session. [Operator instructions] The first question comes from Andrew Strelzik with BMO. Please go ahead.

Andrew Strelzik: Hey, good morning. Thanks for taking the questions. I guess I wanted to start on crush margins – you know, there’s been a lot of concern in the market throughout this year on what would happen with crush margins, but the curve has only strengthened, at least for the U.S. for the rest of this year, and also 2025. I guess the question is how are you thinking about crush margins from here in terms of durability, the ability to capture that margin strength? I don’t know if there are offsets in other regions. Then the press release says that you passed through the 3Q processing strength to the guidance, but I didn’t know if you had made any changes to your assumptions for the fourth quarter.

Greg Heckman: Let me start and John can fill in. I’d say the headline has been demand is good, so we’ve got livestock economics have been good really everywhere except China, where chicken’s been good but pork is bigger and has been the laggard, so very supportive on meal demand. Then soy oils is competitive globally, and some of the support there, of course, is palm, but just overall good demand. We’ve seen Europe, good demand, and part of that is lower soybean meal shipments out of South America. Brazil has seen a little bit of slower spot farmer selling and [indiscernible] some of the logistical commitments down there. Argentina has been margin challenged, but the margins have been good enough to cover fixed costs, so we’ve seen Argentina crushing even with farmers continuing to retain their ownership, kind of waiting for the next round of policy incentives.

Then the U.S. continued to improve on strong soybean meal demand, and part of that has been less flows out of Argentina, but it’s been our own big soy crop, and I touched on China, which the margins have been very volatile there, really driven by softer and weak demand. That’s what we’ve seen carry in, and I don’t think the–you know, as usual, we don’t see a lot of visibility beyond the first half, but right now demand feels pretty good for meal and oil.

John Neppl: Yes, and Andrew, maybe just to touch on the outlook for Q4 and whether we’ve had any changes, I think really the only couple of things I’d mention there, one is when we looked at–if you look at the over-performance in our core business in Q3, we think we probably pulled a little bit of earnings out of Q4, just given the market and customers and uncertainty around EUDR. We think maybe we pulled maybe $0.15 out of Q4 into Q3. Then the other one, of course, was the sale of sugar. We took about $0.15 of earnings out of our Q4 forecast.

Andrew Strelzik: Got it, okay. Okay, that’s helpful. Then I guess if I zoom out, and I know you’re not giving ’25 guidance at this point, and obviously a lot of work to do around acquisitions and buybacks going forward as well, but if I just look at the base business at current levels, I guess, crush appears to be above the baseline. You see the refined continues to hold in better, so I guess just from a high level, how would you frame the set-up into 2025, I guess, relative to maybe a normal type of year for Bunge? Thanks.

Greg Heckman: Yes, and I was kind of specifically speaking to soy. I probably should have mentioned soft is probably the one area that what we’ve seen in the last few years on the soft seed side, we’ve got a lot of weather impacting the Black Sea and European sun and rape production, so that’s not only hurt margins but you’ve got a farmer who’s going to be very spot there with a smaller crop. Now in Canada, we also are seeing canola margins continue to be good, but they’re off from the higher margins we enjoyed in the past, and some of that’s due to a smaller crop. Our soft seed crushing is a smaller business, but that’s definitely softer than what we’ve seen the last few years, so that would be part of the offset to the positive environment we’re seeing in soy.

John Neppl: Yes, I think Andrew, in terms of the baseline, how we think about that in ’25, I would say we’ve been–refined and specialty oils have been pretty resilient, and I think probably logically will perform a little better than baseline in ’25. Crush, we’ll see. We’re off to a good start and crush margins are pretty resilient in the first half of the year, so we’ll see how that progresses, probably some opportunity there. But merchandising has been, continues to be a little performing below baseline, so that one, we’ll see what kind of volatility we get in the market and opportunity. And then of course, we’re taking sugar now out of our baseline, but with what we expect to do on share buybacks relative to sugar, that should be net neutral to slightly positive.

Andrew Strelzik: Great, thank you very much.

Operator: The next question comes from Salvatore Tiano with Bank of America. Please go ahead.

Salvatore Tiano: Yes, thank you very much. I want to ask a little bit about your customers on the fuel side, and specifically, firstly there was an article earlier this week in Bloomberg about how you and some other big crushers are actually slowing down soybean purchases and crushing volumes, because you’re going to see less purchases from your fuel customers, so if you have any comments on that and your strategy there, what you’re seeing in terms of demand in Q4 and perhaps in Q1, as the tax credit plans could change, and also what other feedback you have, I guess. On the other hand, one of the major customers on the fuel side has mentioned that they’re using higher CI score feed stocks right now before they make a more major switch in Q1 to lower CI feed stock, so what are you seeing there? What are your thoughts on this and the risk it holds for next year?

Greg Heckman: Sure, yes. Let me divide that into a couple pieces. Let me talk first about the Bloomberg article – we did see that, and that is not accurate. We continue to have our purchases from farmers be very strong; in fact, if you compare this marketing year, it’s higher than the last several years, so that just wasn’t accurate. As far as the fuel demand and the customers, yes, we do have some uncertainty here in the U.S, and I might start at a high level and finish with the U.S.; but while we’ve had a lot of lack of clarity around U.S. policy, globally things feel better, right? You’ve got Brazil talking–you know, they put in the law and the fuel of the future, so we’re seeing them move from B14 here in ’24 to B15 in ’25, and moving towards B20 in 2030, so they’ll go up 1% annually.

You’ve got Indonesia that just went from B35 and committed to go to B40, and then in Europe, there’s some support put in place now for SAF and maritime fuels, and so those have UCO caps, which will then lead to veg oils as well, so I think it feels better overall. Now back to the U.S., with our policy uncertainty and the switch from a blenders credit to a producers credit, and uncertain RVO, what we’ve got out there, we’ve got billions of dollars of assets that are proven technology in the ground on traditional biodiesel, renewable diesel, and even some SAF that’s running at really low capacity utilization because we haven’t got all the policy and the incentives right yet. We remain positive that will get worked out, right, because one of the things that the policymakers said they wanted to see is to make sure that we could have the supply there.

I think what the market has shown, it’s done it’s work and we’ve shown that we do have the supply, capacity has been added, the market works, and we’ve been able to provide for that industry, so we remain positive that that will get worked out over the next year and that will be positive for demand from the fuel sector, from the renewable feed stocks here in the U.S.

Salvatore Tiano: Perfect. If I may just follow up, I guess [indiscernible] new credit landscape, if someone can only use lower CI feed stocks, they would fully go away from soybean oil, but the main issue is obviously logistical and supply challenges, so do you have any views on the supply and the supply restrictions and limitations for tallow and used cooking oil, and how much essentially of the feed stock mix this could be next year or the next few years?

Greg Heckman: I think I would start again with if you look over the last few years, the market works, and so we’ve seen the low CI feed stocks as well as the vegetable oils, and as policy shifts, it finds its place to the right demand on the globe. There is more demand coming than any one feed stock can address.

John Neppl: Salvatore, this is John. When you look at 45Z, of course we were hoping that would get finalized this year – it may still into Q1. A big part of that now is pushed from agricultural groups in the U.S., particularly farmers, to even the playing field and maybe provide either preference for U.S.-based supply or restrict the import of UCO and tallow and other feed stocks. That could have a pretty big impact on the farm economy, depending on the decision that’s made, and obviously we just want the U.S. farmer to have an even playing field. We think that’s important to get that right in the upcoming finalization of 45Z, but that would certainly drive how much forward feed stocks come into the U.S. It could be similar to last year.

I don’t know if it will–you know, it’s hard to predict whether it’d be more than last year, but certainly if the changes come that I think the farming groups are hoping for, and I think we think is fair, it will certainly provide some tailwind for the products that we supply the industry.

Salvatore Tiano: Thank you very much.

Operator: The next question comes from Tom Palmer with Citi. Please go ahead.

Tom Palmer: Good morning and thanks for the question. I wanted to just ask on the Viterra, and thanks for the update on expected timing. Just on the business’ recent results, does it affect at all how you look at the longer term earnings power for the business, or should we look at kind of the details you laid out last summer as still largely holding? Thank you.

Greg Heckman: I would say absolutely not. We still have the confidence in this combination, it’s a great fit. They are not in the same place as we are. As we’ve had a chance to work on some of the integration planning, seeing that great team that they’ve got and seeing how these teams are working together, and they are as excited, I think, as all of us are to get this deal closed so we can all work together, because there’s just so much that we can’t do at this point in the process. We’re excited about what it means for the long term. This is going to give us a lot of alternatives and ways to grow and to continue to serve our customers in a very differentiated way, and that’s customers at both ends of the value chain.

John Neppl: And Tom, I’d maybe just add, while we’re a little disappointed that things have taken this long to close, it has given us time to continue–we haven’t stopped and just sat and waited, we’ve been continuing to fine tune our planning and doing some things now that we would have maybe done after close, readiness around transition, around organizational design and integration, of course synergy capture. We’re focused on the things we can control around this transaction, and we’re very excited about that. As we’ve mentioned before, we weren’t totally surprised by Viterra’s first half performance given the broader market, but to Greg’s point, this is about a long term opportunity and we feel very good together about the things we can control, and ultimately the market environment will be what it is as we move forward. But in the long run, we think this is a hit.

Tom Palmer: Okay, thank you for that. Then just one topic that had come up in previous quarters, and you did touch on it earlier, was just the lack of farmer selling in South America, I think, and how that’s maybe–you know, there’s offsets that maybe hurts margin in South America but it does seem to be helping soy crush margins as we look at Europe and North America. Just any thoughts on the pace of farmer selling? Is there a point where that should really pick up as we move towards maybe this new harvest in the first half of ’25? Thanks.

Greg Heckman: Yes, we think that you probably are right – it will be in the first half of ’25, one, as the South America farmer gets a better idea in Argentina of how policy will shake out. Even if something’s communicated here in ’24, there’s not much of the year left to probably make much of a difference here, so I think first half ’25 will be key on that. Then in Brazil, where we’ve got some good rains and planting is really accelerating down there, I think we feel like we’ll see another big crop there in South America, and I think that will give some confidence to the producer. Then here in the U.S., of course, we’re harvesting a real big bean crop right now, and so as we get to the end of that, we’ll see how the producer–they never like a lower price than prior year, but ultimately you’ve got to make some decisions and manage some risk, and we’ll see that, I think, starting to move here in the first half of next year.

Tom Palmer: Right, thank you.

Operator: The next question comes from Manav Gupta with UBS. Please go ahead.

Manav Gupta: Good morning. My question is on your growth capex. You’re obviously spending on your growth projects. Help us understand what’s the progress over there, when are the key start-up dates for these growth projects, when do you expect them to come online and start making a material contribution to the EBITDA?

Greg Heckman: Yes, so we have four key large projects underway today, and I think that 2025 will really be the biggest year in terms of spending capex on those, as those projects move toward finalization. I think realistically on those projects, we’re looking at late ’24–I’m sorry, late ’25 commissioning to early ’26, so not probably a lot of impact on ’25 results just given the fact that you’ve got to work through commissioning and bugs as you get these plants up and going. I think really, we’ll start to look for first half ’26 for these to start contributing and expect all of them to be running by second half, so second half of ’26 is really how I’d see the addition to earnings from those projects from a run rate perspective. Then of course, once we complete those projects toward the end of ’25, early ’26, then we’ll start to see a more normalized capex level back half of ’26 and beyond.

Manav Gupta: My follow-up here is a little bit–you’ve also mentioned this, that although the deal has been delayed a little, it’s given you more time to plan, so help us understand now when Viterra does close, do we expect some of those synergies to be realized earlier than expected? How has the timeline of moving the deal allowed you to plan better as you close on it?

Greg Heckman: Yes, it’s really been around the–I’ll say the organizational design and getting things ready and right for day one with no disruption. Unfortunately despite the extended time frame, we still cannot get together commercially, and so we have not been able to accelerate any of the commercial planning and the commercial roles, but what we–you know, our role in the market together, that unfortunately we have to wait until close. But we have been able to spend more time with the teams, make sure we’re getting the right people in the right roles going forward, and I think we feel like a lot of the uncertainty sometimes that can happen right after close, we’re addressing that stuff now so that people have focus and confidence the day we close the transaction, and lower our risk of any kind of disruption in the day-to-day.

But again, unfortunately we have not been able to accelerate the commercial planning side, which is really where we think the long term opportunity is.

Manav Gupta: Thank you so much.

Operator: The next question comes from Heather Jones with Heather Jones Research. Please go ahead.

Heather Jones: Good morning, thanks for the question.

Greg Heckman: Morning Heather.

Heather Jones: I had a question on bean oil and meals, but starting with bean oil, given the biofuel policy uncertainty we’ve got in the U.S., demand for bean oil could be very depressed in late Q4 and Q1. I was just curious if you think the export demand could be strong enough to offset that, given soybean oil is attractive price relative to palm and rape. Also, do you see any potential logistical constraints to the U.S. handling that magnitude of exports?

Greg Heckman: Yes, I think you’ve got that right, that soy oil is competitive globally right now against palm and some of the soft oils, and we’ve now seen the U.S. being competitive again. I do think we can handle those logistics because the U.S. was always holding the residual stocks prior to some of the biofuels demand the last few years. We held the residual stocks for the world and we did export as it was needed, so as the market is calling for that, I think we’re in good position to do that and that’s one of the things that we feel good about on the oil demand side globally.

Heather Jones: Okay, thank you. Then on meal, that demand has been much stronger than expected this year, and it seems to be because of a big step-up in feed ration inclusion, because animal numbers globally just aren’t up that much. When we look to ’25, I was wondering if you think there’s room for additional sizeable increases in ratio inclusion, assuming that pricing is relatively attractive.

Greg Heckman: Yes, soybean meal demand has been very good, and you’ve got MiD proteins around, you’ve got a wheat crop that’s not as competitive for feeding on the wheat side, and you’ve got the other–if you look historically, when meal gets cheaper, people like to feed it. They like feeding meal, and when they can–when the numbers work and the animal profitability is up, which is the situation we’re in right now, we see the inclusion rates go up, and I think that’s the demand that we have seen this year in the U.S. and globally, so we kind of expect that to continue there into ’25. We can’t see much past the first half, but that’s what we see right now.

John Neppl: Yes, and Heather, I would just add that I think one of our strengths on the commercial side is our ability to market meal globally, and we actually market today more meal than we produce ourselves, so we’ve got a team that’s very steeped in the experience of marketing meal globally and as things change and as market demand ebbs and flows, I think our team is usually right on top of that.

Heather Jones: If I could sneak in a clarifying question, you guys probably have as good visibility as anyone into feed profiles globally. Could we see a situation in ’25 where we have an increase in inclusion rates as much as we did this year, like–I mean, I don’t know if we’re near a cap, or could we see another sizeable step-up?

Greg Heckman: I think you’ve got to continue to watch how it sets up versus the competing, and what we do know right now is less wheat feeding, less MiD proteins, we’ve got some smaller seed crops – you know, you don’t make as much meal in the soft crush, but you’ve got Europe and Black Sea with some smaller seed crops, so some less meal there. Yes, it’s all part of the factors that are setting up the current situation we’ve got, which has been constructive. You’ve all seen it in the numbers.

Heather Jones: Okay, thank you so much.

Operator: The next question comes from Stephen Hayes with Morgan Stanley. Please go ahead.

Stephen Hayes: Good morning. Maybe just wanted to ask kind of a follow-up question on the refined side of things. I think there was a comment before to an earlier question about it being resilient and better than baseline in 2025. I think you’re still quite a bit above baseline, where we are right now, so can you kind of help frame, I guess, what a bit better looks like and how we should be thinking about it next year?

John Neppl: Yes, I’ll start and Greg can jump in. Look – I think we certainly are seeing as expected, and what we contemplated in our long term baseline was that refining premiums would moderate and the demand would go back more toward crude edge oil, especially for the energy side. I think what we’ve seen is a very strong, somewhat of a resilient market on the food side – it’s been very good. We had about a $400 million baseline for that business, and as you pointed out, we’ve been performing above that. I think just given our increased capability in our portfolio and what we’ve seen on the food side, plus probably a little bit more resilient demand on energy, I think we feel like we’re set. It’s hard today to predict what that above baseline number is going to be – I think we have to get a better handle on where things are heading from a policy standpoint.

These things around 45Z and RVO and things like that could have an impact certainly on even the refining versus crude piece of it, but ultimately we feel pretty good about that business being on probably more solid footing than it’s ever been in total, when you look at the specialty side and that refined piece. Obviously the refining – again, the energy piece of that, we did expect to moderate, but we’ve been very pleased with the food demand.

Stephen Hayes: Got it. Thank you for that color. Then just on the meal side of things, there’s been a bunch of capacity that’s kind of come on in the U.S. this year, understanding you said it’s not fully running yet and it takes some time to kind of hit that run rate. Is the market feeling the impact of this yet, or how should we think about it as even more supply is expected to come on in ’25, and there’s some projects slated for ’26, yourselves included? How should be thinking about the market’s ability to, I guess, absorb the excess meal going forward?

Greg Heckman: Yes, the thing about meal, it’s a very global market. I think John mentioned, we market more than we produce. We continue to make the investments we’ve made, investments in our PNW asset to be able to handle meal here in the U.S. and get it to export, so I think the investments will continue to be made to connect the supply to the demand globally. You know, as you’ve said, those plants, they’re not like flipping a light switch – they do come on, and so they kind of get dovetailed into the demand, and price does its work around the inclusion rates, so we think the market will do its work.

John Neppl: Maybe I’d just add one thing, Stephen. Greg mentioned the PNW, where we’re adding some capacity for export of meal. We’re doing the same in the Gulf, so we have our big project, of course – our expansion with Chevron in the Gulf of Destrehan, our adjacent export terminal, we’re expanding the capacity of that to handle more meal to be exported from the U.S. We’ve anticipated this for two or three years, and the projects are well underway and moving along, and we’ll be well positioned, as well positioned as anybody to get this stuff out in the market where it needs to go internationally.

Stephen Hayes: Thank you, appreciate it.

Operator: Our next question comes from Ben Theurer with Barclays. Please go ahead.

Ben Theurer: Yes, good morning. Greg, John, thanks for taking my question. Just a few things to–clarification, I think you said there’s a $0.15 impact on the loss that you need to book for the bioenergy, the disposal. Was that something that you expected to happen in 3Q and now it’s just moved into 4Q for that implicit downgrade of that $0.15? That would be question number one. Then just question number two related to the timing of Viterra and the pending approvals, can you remind us which are the big jurisdictions that are still pending right now?

John Neppl: Yes, I’ll start with sugar and Greg can talk about Viterra timing. We didn’t–we had a forecast the full year for sugar because we really didn’t know when this was going to actually close. The Q3 was simply underperformance, so we didn’t have a good Q3 in sugar, as we highlighted, and then Q4, we lost about $0.15 of earnings that was in our prior forecast because of selling and closing on Aug.1, but we locked that in there until we actually certainty around close. That’s just reflective of the lost earnings for Q4, and then of course as I mentioned, you can see the results for Q3, that we were well below where we expected.

Ben Theurer: Yes, okay. Got it.

John Neppl: Overall, second half probably down $0.35, I would say, between Q3 and Q4 from what we had originally expected.

Ben Theurer: Just sugar?

John Neppl: Just sugar.

Ben Theurer: Okay.

Greg Heckman: With the core business stepping up and covering that in the second half, so it’s a better quality of earnings. We like the way it happened.

Ben Theurer: Well said. Then on the pending approvals?

John Neppl: The regulatory – yes, on the regulatory since the last time we were all together, of course, we got the EU conditional approval, where we’ve got to do some asset sales in Poland and Hungary, so we’re working through that process currently and making good progress. In Canada, you may have seen there’s a new transport minister there – we are engaged with them and making great progress addressing all the questions and closing out the issues. We expect that to be in the relative near term. Then the other, of course, is in China, and we continue to work with the Chinese authorities. We have very productive discussions and able to respond to all their questions, so again feel that that should be hopefully here in the near term.

Lastly, look forward to getting the regulatory approvals done, as we said. In those scenarios, we don’t see anything that would be material to the economics of the transaction, and we just cannot wait to put these two great companies together and get these teams to work. Everybody is excited and feels like we’ve got our hands tied behind our backs here, and can’t wait to get to the next stage.

Ben Theurer: Okay, and then Argentina – I mean, obviously that’s a post-close approval process, but there was some news just recently about Argentine soy exporter that you were planning to take over, and that got kind of blocked out of bankruptcy. Has that any consequences on how you think about the post-close approval process in Argentina?

Greg Heckman: No. No, not at all. Of course, we’ve been in Argentina a long time, we work closely with the authorities there. It’s an important operation for us, so the appeal is just part of the process, the legal process down there. We weren’t really surprised by it. It’s kind of a technical issue, and we’ll continue to work through the process. But no, we’ve always thought about those processes working in parallel.

Ben Theurer: Okay, thank you.

Operator: This concludes the question and answer session. I would like to turn the conference back over to Greg Heckman for any closing remarks. Please go ahead.

Greg Heckman: Thank you. Thanks again for joining us today, and we appreciate your interest in Bunge. I want to just close by thanking the team one more time for their dedication. Our performance is a testament to the quality of our people and the culture that we’ve built here at Bunge. It’s allowed us to execute on our day-to-day business, to maintain a relentless drive for continuous improvement, and to make great progress on the integration planning. I’m as excited as ever about the future of Bunge and what we’re going to be able to accomplish together with Viterra. We look forward to speaking with you again soon, and have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.