FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
July 31, 2003
Commission File Number 001-16625
BUNGE LIMITED
(Translation of registrant's name into English)
50 Main Street
White Plains, New York 10606
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
--- ---
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information contained
in this Form the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the
registrant with Rule 12g3-2(b): 82-
This report on Form 6-K shall be incorporated by reference into the Registration
Statement on Form F-3 (Registration No. 333-104974), as amended, Registration
Statement on Form F-3 (Registration No. 333-106182), as amended, and the
Registration Statement on Form F-4 (Registration No. 333-104975), as amended,
filed by Bunge Limited Finance Corp. and Bunge Limited under the Securities Act
of 1933, as amended, and the Registration Statements on Form S-8 (Registration
Nos. 333-66594, 333-75762 and 333-76938) filed by Bunge Limited under the
Securities Act of 1933, to the extent not superseded by documents or reports
subsequently filed under the Securities Act of 1933 or the Securities Exchange
Act of 1934, as amended.
The following is a summary of select items of the unaudited consolidated results
of Bunge Limited for the second quarter of 2003, the three and six month periods
ending June 30, 2003. These results include Cereol, which was acquired by Bunge
in October 2002.
Second Quarter Results
Overview. Bunge Limited reported second quarter 2003 net income of $182 million,
or $1.83 per share, compared to net income of $50 million, or $0.50 per share,
in the second quarter of 2002. The second quarter 2003 results included a gain
of $111 million, or $1.11 per share, on the sale of Bunge's Brazilian soy
ingredients business to The Solae Company, its joint venture with DuPont. For
the second quarter of 2003, compared to the same period last year volumes grew
19% to 28 million metric tons and net income, excluding the gain on the sale of
Bunge's Brazilian soy ingredients business, increased 42% to $71 million.
Income from Operations. Income from operations increased in the fertilizer and
food products divisions. Sales of fertilizer nutrient products were robust and
margins expanded from last year due to higher international fertilizer prices.
Edible oil products results improved primarily due to the Cereol acquisition.
Income from operations declined in the agribusiness division in large part due
to the appreciation of the Brazilian real and Argentine peso relative to the
U.S. dollar. These currency effects were offset almost entirely by higher net
foreign exchange gains, recorded in non-operating income (expense)-net, due to
the natural hedge provided by debt funding commodity inventories. Bunge's
results for the second quarter and six months ended June 30, 2003, include
Cereol, acquired in October 2002.
Agribusiness. Sales volumes for the quarter ended June 30, 2003 increased 21%,
and gross profit decreased 60%, or $125 million, from the same period last year
in Bunge's agribusiness division. In the same period, income from operations
decreased 97%, or $150 million, to $5 million. Net exchange gains on U.S. dollar
denominated debt financing commodity inventories, included in non-operating
income (expense)-net, almost entirely offset the reduction in income from
operations. Sales volumes increased in oilseed processing and international
marketing driven by the large South American harvest. Margins were affected by
weakness in North America and Western Europe, as well as overall higher energy
costs. South American results, adjusted for currency effects on commodity
inventories, matched the outstanding performance of the previous year's quarter
despite a more difficult foreign exchange environment. Volumes of Bunge's
international marketing operations were 20% above the same quarter last year,
mostly due to increased sales to China.
Fertilizers. Sales volumes for the quarter ended June 30, 2003 decreased 3%, and
gross profit increased 47%, or $28 million, from the same period last year in
Bunge's fertilizer division. In the same period, income from operations
increased 94%, or $31 million, to $64 million. In a traditionally weaker
quarter, increased international prices for imported fertilizers and raw
materials helped increase local margins, as products are priced to import
parity. Animal nutrient sales were robust due to a strong export market for
Brazilian meat products.
Food Products. Sales volumes for the quarter ended June 30, 2003 increased 29%,
and gross profit increased 84%, or $43 million, from the same period last year
in Bunge's food products division. In the same period, income from operations
increased 106%, or $18 million, to $35 million. Edible oil product results were
significantly higher due to the inclusion of Cereol's operations in this
business line and improvements in North and South America.
Solae and Saipol. On April 2, 2003, The Solae Company was formed. The Solae
Company is a soy ingredients joint venture between Bunge and DuPont and a key
component in the broader strategic alliance between the two companies. Solae's
formation involved the contribution of Bunge's North American and European soy
ingredients operations and DuPont's Protein Technologies business to the joint
venture and the sale, on May 5, 2003, of Bunge's Brazilian soy ingredients
business to Solae. This sale resulted in a gain of $111 million, which is
included in income from operations. Bunge received $251 million in net cash
proceeds, which were used to reduce outstanding indebtedness.
On July 3, 2003, Bunge completed the sale of the Lesieur bottled oil business in
France to Saipol, Bunge's existing joint venture with Sofiproteol (the financial
arm of the French oilseed farmer's association). Bunge received euro 186.3
million (approximately $215 million) in cash and repayment of Lesieur
intercompany debt owed to Cereol at closing. Bunge used the net cash proceeds
from this transaction to reduce outstanding indebtedness.
Income from Operations. Income from operations increased 4% to $205 million in
the second quarter of 2003 from $197 million in the same period in 2002. Income
from operations for the second quarter of 2003 does not reflect adjustments for
net interest expense allocated to working capital of $20 million or foreign
exchange gains allocated to working capital of $54 million for the second
quarter of 2003 and income from operations for the second quarter of 2002 does
not reflect adjustments for net interest expense allocated to working capital of
$14 million or foreign exchange losses allocated to working capital of $72
million for the second quarter of 2002. Income from operations for the second
quarter of 2003 includes the $111 million gain on the sale of Bunge's Brazilian
soy ingredients business.
Non-operating Income (Expense) - net. Non-operating income (expense) - net
improved by $146 million from an expense of $97 million to income of $49
million, primarily due to foreign exchange gains in Brazil on U.S. dollar
denominated debt. The Brazilian real appreciated 17% against the U.S. dollar in
the second quarter of 2003, compared to a devaluation of 18% in the same period
last year. Partially offsetting the improvement was higher interest expense on
increased debt incurred to acquire Cereol and debt assumed in the acquisition.
Also, in the latter half of 2002 and May 2003, Bunge issued long-term debt at
relatively higher interest rates to reduce its reliance on short-term debt and
finance the current portion of long-term debt coming due.
Non-operating income (expense) - net consisted of:
(US$ in millions) Quarter Ended
June 30,
2003 2002
Interest income $ 27 $ 19
Interest expense (47) (32)
Interest expense on debt financing readily
marketable inventories (4) (8)
Foreign exchange gains (losses) 70 (79)
Other income 3 3
Total non-operating income (expense) - net $ 49 $ (97)
Net Income. Net income increased to $182 million in the second quarter of 2003
from $50 million in the second quarter of 2002. Second quarter 2003 net income
was increased by the $111 million, or $1.11 per share, primarily due to the gain
on the sale of the Brazilian soy ingredients business.
Six Month Results
Overview. Sales volumes increased 33%, and gross profit increased 6% in the six
months ended June 30, 2003, over the same period last year. Income from
operations increased 22% to $323 million in the same period. Income from
operations included a $111 million gain on the sale of Bunge's Brazilian soy
ingredients business. The income from operations from the agribusiness segment
decreased from last year, primarily due to inventory mark-to-market losses in
South America that resulted from the appreciation of the Brazilian real and
Argentine peso. Offsetting these losses almost entirely were increases in net
foreign exchange gains on the U.S. dollar denominated debt financing commodity
inventories, which are included in non-operating income (expense)-net. Weakness
in North American oilseed processing margins and higher energy costs also
affected results. Growth in international marketing continued with a 26%
increase in volumes. The fertilizer segment benefited from better margins in all
business lines. Results in the food products division exceeded last year,
primarily due to the inclusion of Cereol's operations in this division and
improvements in edible oils in North and South America.
Income from Operations. Income from operations increased 22% to $323 million for
the six months ended June 30, 2003 from $265 million in the same period in 2002.
Income from operations for the six months ended June 30, 2003 does not reflect
adjustments for net interest expense allocated to working capital of $39 million
or foreign exchange gains allocated to working capital of $64 million for the
six months ended June 30, 2003 and income from operations for the six months
ended June 30, 2002 does not reflect adjustments for net interest expense
allocated to working capital of $25 million or foreign exchange losses allocated
to working capital of $76 million for the six months ended June 30, 2002. Income
from operations for the six months ended June 30, 2003 includes the $111 million
gain on sale of Bunge's Brazilian soy ingredients business.
Non-operating Income (Expense) - net. Non-operating income (expense) - net,
improved by $134 million, from an expense of $106 million to income of $28
million, primarily due to foreign exchange gains in Brazil on the company's U.S.
dollar denominated debt. The Brazilian real appreciated 23% against the U.S.
dollar in the first six months of 2003 versus a devaluation of 18% in the same
period last year. Partially offsetting the improvement was higher interest
expense on increased debt incurred to acquire Cereol and debt assumed in the
acquisition. Also, in the latter half of 2002 and May 2003, the company issued
long-term debt at relatively higher interest rates to reduce its reliance on
short-term debt and finance the current portion of long-term debt coming due.
Non-operating income (expense) - net consisted of:
(US$ in millions) Six Months Ended
June 30,
2003 2002
Interest income $ 58 $ 52
Interest expense (103) (70)
Interest expense on debt financing readily
marketable inventories (8) (12)
Foreign exchange gains (losses) 77 (84)
Other income 4 8
Total non-operating income (expense) - net $ 28 $ (106)
Net Income. Net income for the six months ended June 30, 2003 increased to $222
million, primarily due to the $111 million, or $1.11 per share, gain on the sale
of the Brazilian ingredients' business. Net income for the same six month period
in 2002 of $63 million was increased by $18 million, or $0.18 per share, as a
result of tax credits relating to refunds of prior years' taxes and reversals of
deferred tax asset valuation allowances.
In 2002, Bunge recorded a goodwill impairment charge of $14 million, net of tax,
as a cumulative effect of change in accounting principles, resulting from the
adoption of SFAS No. 142, Goodwill and Other Intangibles,
and a $9 million charge, net of tax, resulting from the adoption of SFAS No.
143, Accounting for Asset Retirement Obligations.
Total Debt. Total debt, which includes short-term debt, current maturities of
long-term debt and long-term debt, at June 30, 2003, decreased $308 million to
$3,095 million from December 31, 2002, primarily due to the net proceeds of $251
million received on the sale of the Bunge's Brazilian soy ingredients business
to The Solae Company. Since the sale of Lesieur was completed in early July
2003, the $215 million in proceeds that Bunge received has not been reflected in
Bunge's total debt at June 30, 2003. Bunge's total debt has not been adjusted to
take into account the $441 million in cash and cash equivalents and $13 million
in marketable securities that Bunge had at June 30, 2003. At December 31, 2002,
Bunge had $470 million in cash and cash equivalents and $12 million in
marketable securities. In addition, total debt has not been adjusted for the
$1,949 million of readily marketable inventories that Bunge had at June 30,
2003. At December 31, 2002, Bunge had $1,517 million in readily marketable
inventories. Readily marketable inventories are agricultural inventories that
are readily convertible to cash because of their commodity characteristics,
widely available markets and international pricing mechanisms.
Summary of Results
(In millions, except volumes, per share data and percentages)
Quarter Ended Percent
06/30/2003 06/30/2002 Change
Volumes (in thousands of
metric tons) 28,027 23,552 19%
Net sales $5,226 $3,103 68%
Gross profit 266 320 (17)%
Income from operations (1) 205 197 4%
Non-operating income
(expense) - net 49 (97) (151)%
Income tax expense (47) (36) 31%
Income before minority interest 207 64 223%
Minority interest (25) (14) 79%
Net income $182 $50 264%
Earnings per common
share - basic:
Net income per share $1.83 $.50 266%
Weighted average number
of shares outstanding 99,696,727 99,249,886
Management's Performance Measurement
EBITDA (2) $294 $144 104%
(1) Income from operations for the quarter ended June 30, 2003, includes a
$111 million gain on the sale of Bunge's Brazilian soy ingredients
business to The Solae Company.
(2) Management uses selected non-GAAP performance measures for purposes of
assessing profitability, leverage capacity and solvency. A
reconciliation of these measures to the most directly comparable U.S.
GAAP measure is provided below in the section "Reconciliation of
Non-GAAP Measure."
Summary of Results
(In millions, except volumes, per share data and percentages)
Six Months Ended Percent
06/30/2003 06/30/2002 Change
Volumes (in thousands
of metric tons) 50,838 38,127 33%
Net sales $10,110 $5,787 75%
Gross profit 534 504 6%
Income from operations (1) 323 265 22%
Non-operating income
(expense) - net 28 (106) (126)%
Income tax expense (84) (39) 115%
Income before minority interest 267 120 123%
Minority interest (45) (34) 32%
Income before cumulative
effect of change in
accounting principles 222 86 158%
Cumulative effect of
change in accounting
principles, net of
tax of $6 (2002) (2) -- (23)
Net income $222 $63 252%
Earnings per common
share - basic:
Income before cumulative
effect of change in
accounting principles $2.23 $.93 140%
Cumulative effect of change
in accounting principles (2) -- (.25)
Net income per share $2.23 $.68 228%
Weighted average number
of shares outstanding 99,641,565 92,452,815
Management's Performance Measurement
EBITDA (3) $449 $235 91%
(1) Income from operations for the six months ended June 30, 2003, includes
a $111 million gain on the sale of Bunge's Brazilian soy ingredients
business to The Solae Company.
(2) Effective January 1, 2002, Bunge adopted SFAS No. 142, Goodwill and
Other Intangibles. As a result of the SFAS No. 142 adoption, in the
first quarter of 2002, Bunge recorded a charge of $14 million, net of
tax, representing a write-off of goodwill in the milling and baking
products segment. Effective January 1, 2002, Bunge adopted SFAS No. 143,
Accounting for Asset Retirement Obligations. As a result of the early
adoption of SFAS No. 143, Bunge recorded a cumulative effect of a change
in accounting principle charge of $9 million, net of tax.
(3) Management uses selected non-GAAP performance measures for purposes of
assessing profitability, leverage capacity and solvency. A
reconciliation of these measures to the most directly comparable U.S.
GAAP measure is provided below in the section "Reconciliation of
Non-GAAP Measure."
Segment Results
(In millions, except volumes and percentages)
Bunge Limited and
Consolidated Subsidiaries Cereol (2)
Quarter Ended Percent Quarter Ended
06/30/2003 06/30/2002 Change 06/30/2003
Volumes (in thousands
of metric tons)
Agribusiness 23,906 19,749 21% 2,870
Fertilizer 2,417 2,482 (3)% --
Edible Oil Products 823 393 109% 434
Milling and Baking
Products (1) 873 897 (3)% --
Other (1) 8 31 (74)% --
Food Products 1,704 1,321 29% 434
Total 28,027 23,552 19% 3,304
Gross Profit
Agribusiness $84 $ 209 (60)% $17
Fertilizer 88 60 47% --
Edible Oil Products 69 22 214% 42
Milling and Baking
Products (1) 24 23 4% --
Other (1) 1 6 (83)% --
Food Products 94 51 84% 42
Total $ 266 $ 320 (17)% $59
Income from Operations
Agribusiness $5 $ 155 (97)% $ 1
Fertilizer 64 33 94% --
Edible Oil Products 26 3 767% 17
Milling and Baking
Products (1) 8 9 (11)% --
Other (1) 1 5 (80)% --
Food Products 35 17 106% 17
Gain on Sale of Soy
Ingredients 111 -- --
Unallocated (10) (8) 3
Total $ 205 $ 197 4% $21
(1) In the first quarter of 2003, Bunge changed the name of its wheat
milling and bakery products segment to "milling and baking products" in
connection with the reclassification of its corn milling products
business line from the "other" segment to the milling and baking
products segment. As a result of this change, the other segment
consisted of soy ingredients until its assets were sold in May 2003 to
The Solae Company, Bunge's joint venture with DuPont. Second quarter
2002 amounts have been reclassified to reflect this change.
(2) Effective October 2002, Cereol is a consolidated subsidiary of Bunge,
and its results of operations are included in Bunge's consolidated
results of operations for the quarter ended June 30, 2003. Cereol's
volume, gross profit and income from operations by segment, as prepared
under U.S. GAAP, are being presented separately for informational
purposes only.
Segment Results
(In millions, except volumes and percentages)
Bunge Limited and Cereol (2)
Consolidated Subsidiaries Six Months
Six Months Ended Percent Ended
06/30/2003 06/30/2002 Change 06/30/2003
Volumes (in thousands
of metric tons)
Agribusiness 43,007 31,294 37% 5,992
Fertilizer 4,278 4,291 --% --
Edible Oil Products 1,682 749 125% 930
Milling and Baking
Products (1) 1,731 1,734 --% --
Other (1) 140 59 137% 105
Food Products 3,553 2,542 40% 1,035
Total 50,838 38,127 33% 7,027
Gross Profit
Agribusiness $ 193 $ 286 (33)% $35
Fertilizer 148 114 30% --
Edible Oil Products 133 47 183% 84
Milling and Baking
Products (1) 42 45 (7)% --
Other (1) 18 12 50% 8
Food Products 193 104 86% 92
Total $ 534 $ 504 6% $127
Income from Operations
Agribusiness $50 $ 186 (73)% $1
Fertilizer 106 62 71% --
Edible Oil Products 53 9 489% 36
Milling and Baking
Products (1) 11 15 (27)% --
Other (1) 11 8 38% 4
Food Products 75 32 134% 40
Gain on Sale of
Soy Ingredients 111 -- --
Unallocated (19) (15) --
Total $ 323 $ 265 22% $41
(1) In the first quarter of 2003, Bunge changed the name of its wheat
milling and bakery products segment to "milling and baking products" in
connection with the reclassification of its corn milling products
business line from the "other" segment to the milling and baking
products segment. As a result of this change, the other segment
consisted of soy ingredients until its assets were sold in May 2003 to
The Solae Company, Bunge's joint venture with DuPont. The first six
months of 2002 amounts have been reclassified to reflect this change.
(2) Effective October 2002, Cereol is a consolidated subsidiary of Bunge,
and its results of operations are included in Bunge's consolidated
results of operations for the six months ended June 30, 2003. Cereol's
volume, gross profit and income from operations by segment, as prepared
under U.S. GAAP, are being presented separately for informational
purposes only.
Reconciliation of Non-GAAP Measure
EBITDA. Bunge presents EBITDA, or earnings before interest, tax, depreciation
and amortization, because management believes it is a meaningful measure of
Bunge's operating performance. EBITDA is not a measure of financial performance
under U.S. GAAP and should not be considered as an alternative to net income or
any other measure of performance under U.S. GAAP as a measure of performance.
Below is a reconciliation of net income to EBITDA:
Quarter Ended
(US$ in millions) 06/30/2003 06/30/2002
Net income (1) $182 $50
Add back:
Interest expense 47 32
Interest expense on debt financing
readily marketable inventories 4 8
Income tax expense 47 36
Depreciation, depletion & amortization 41 37
Less:
Interest income (27) (19)
EBITDA $294 $144
Six Months Ended
(US$ in millions) 06/30/2003 06/30/2002
Net income (1) $222 $63
Add back:
Cumulative effect of change
in accounting principles -- 23
Interest expense 103 70
Interest expense on debt
financing readily marketable inventories 8 12
Income tax expense 84 39
Depreciation, depletion & amortization 90 80
Less:
Interest income (58) (52)
EBITDA $449 $235
(1) Net income for the quarter ended and six months ended June 30, 2003,
includes a $111 million gain on the sale of Bunge's Brazilian soy
ingredients business to The Solae Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 31, 2003 BUNGE LIMITED
By: /s/ William M. Wells
---------------------------
William M. Wells
Chief Financial Officer