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Bunge Q4 profits drop on weak oilseed processing margins
Bunge Global, a commodities trader in agriculture, posted a lower-than-expected fourth quarter profit on Wednesday. Weak oilseed processing margins across key markets affected the results of its core agribusiness division. The company's processing business will remain under pressure by 2025, due to low margins in a difficult economic environment. Global trade tensions as well as uncertainty over biofuel policies are also causing problems for crop traders. The struggles come as Bunge is working to close a deal to acquire grain handler Viterra, a merger that would create an agribusiness powerhouse closer in size to its peers Archer-Daniels-Midland and Cargill. Bunge stated that regulatory approvals were nearing completion for the deal. Bunge shares fell 4.3% in the minutes before the bell. Profits have been eroded as global surpluses of crops such as soybeans and corn drove prices down to four-year-lows in the past year, cutting into margins. ADM posted on Tuesday its lowest fourth quarter profit in six-years and announced that it would be cutting costs and jobs. It joined Cargill to tighten its belt. Bunge's agribusiness division, which accounts for over 80% its revenue, saw core earnings fall to $364m in the fourth quarter, from $639m a year ago. The adjusted earnings of the sub-segment processing fell by nearly 60% as a result of lower crushing results for soybeans in North and South America, and weak markets for softseeds in Europe. Bunge's unit for refined and specialty oils saw its adjusted profit drop by 25%, in part due to uncertainty over U.S. Biofuel Policy. Bunge's adjusted earnings per share for 2025 is $7.75, down from $9.19 in 2024. This misses analysts' expectations by $8.71. According to data compiled and analyzed by LSEG, the Missouri-based firm posted an adjusted profit per share of $2.13 in the quarter that ended December 31, down from $3.70 a year ago. This was also below the $2.24 consensus analyst estimate. Reporting by Karl Plume from Chicago and Vallari Shrivastava from Bengaluru. (Editing by Krishna Chandra Eluri, Mark Potter).
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Brazil's farmers are betting on solar energy to stabilize the power supply
According to experts and growers, Brazilian farmers are expanding their solar power capacity and testing battery storage solutions in an effort to increase electricity supply predictability and reduce diesel consumption. The increased use of alternative energies in Brazil, which is the largest exporter of food products, will result in greater business for equipment suppliers, a reduced dependency on fossil fuels and more efficient agriculture. WEG and other companies that offer energy solutions say that the interest of farmers in battery-based systems has increased in recent months. Projects are now being implemented after a dramatic drop in battery costs. Around 14% of the solar power installed in Brazil is generated by rural properties. 4.8 gigawatts are distributed through small photovoltaics, which are often constructed on roofs or undeveloped land. According to an analysis by the Brazilian Association of Photovoltaic Solar Energy, solar capacity in agriculture has increased more than sevenfold since 2020 when renewable energy projects began booming across the country. According to the association, the number of rural consumers using solar panels has risen from 54,000 in 2014 to 471,000 at the end of 2024. Solar power is used by Brazilian farmers for irrigation of crops, air conditioning, lighting, pumping up water in reservoirs, and powering cold-storage rooms. Batteries can also be used to reduce diesel consumption in farms where generators run on the fuel power irrigation and agricultural equipment on farms that are not connected to the grid. Farm group Bom Futuro in Mato Grosso invests in energy generation and is currently evaluating the use of batteries to reduce power outages. Livio Costa is Bom Futuro’s manager of Energy. He said that interruptions in electricity supply disrupt cotton machines and production causing material loss. He said that if the power went out for 15 minutes it could take two hours before production resumed. This doesn't happen just once. "It happens several times during harvest." Bom Futuro’s investments in energy generation reflect an increased demand on farms for grain drying, storage and cotton processing that is power intensive. (Reporting and writing by Leticia fucuchima, Ana Mano, and Paul Simao).
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Tax disputes between India and foreign companies
In India, foreign companies often face difficulties due to the high tax demands imposed on them by India. These include levies on large M&A deals or duty evasion. The following are the most important tax disputes that have occurred in the past and currently involving foreign companies. Kia, a South Korean car manufacturer, has been accused by officials of evading $155 million worth of taxes through misclassification. The company, however, is disputing this privately with the officials. Kia imports parts of a vehicle in separate shipments, assembling the vehicles in India. They pay a lower applicable tax, avoiding the higher tax when the parts are assembled as a CKD (completely knocked-down unit) of a automobile. VOLKSWAGEN Volkswagen, in a case similar to Kia's, has sued Indian authorities at a Mumbai court, after receiving a tax notice of $1.4 billion for importing parts that were related to 14 models including some Audi models instead of classifying the parts as CKD. In its court case, the German automaker argues that India's tax demands are "impossibly large" and will affect their investment in India as well as foreign investor sentiment. VODAFONE In one of the more controversial cases, Vodafone received a tax demand of $2 billion when it bought Indian assets from HutchisonWhampoa for $11 billion in 2007. In the dispute, there were years of litigation. The Indian top court ruled in favour of the company. This was followed by a law change that reimposed demand and international arbitration between both sides. Vodafone won the arbitration in 2020. CAIRN ENERGY Cairn Energy, a British company, was hit with a tax bill of more than $1.4billion in 2007 for the transfer shares that occurred during reorganization. Cairn sold its majority share of Cairn India in 2011 to Vedanta Ltd. This reduced its stake in the Indian firm to around 10%. In 2021, the Indian government and Cairn india finally settled their years-long dispute by offering to refund tax amounts. PERNOD RICHARD Indian authorities have accused the French liqueur giant Pernod Ricard of undervaluing some imports over a period of more than 10 years to avoid paying full duties. India has demanded roughly $250 million of back taxes, but Absolut and Chivas Regal have disputed the findings. The dispute is still pending. Pernod warned the Narendra Modi administration in 2022 that its tax disputes with authorities over the valuation of liquor imports had hampered new investment and its existing business. Indian authorities have accused BYD, a Chinese automaker, of not paying $8.37m for parts used in cars that it assembles and then sells in India. BYD deposited the request but the investigation is still underway and could result in additional tax charges and penalty, as has been reported previously. (Reporting and editing by Aditya K. Kalra; Arpan Chaturvedi)
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Walt Disney exceeds its earnings targets thanks to 'Moana 2
Walt Disney's earnings for the third quarter of 2018 exceeded Wall Street's estimates by a wide margin on Wednesday. The results were boosted by "Moana 2's" strong performance at the box office during the holiday season and the higher profits made in the streaming business. In premarket trading, shares of the company increased by about 3%. The strong entertainment segment helped to offset the decline in Disney's domestic parks in Florida, which was impacted by Hurricanes Helene and Milton. In addition, the Experiences group led by the parks incurred approximately $75 million of expenses related to the launch of the Disney Treasure Cruise Ship in December. Disney has reported a 44% increase in adjusted earnings per share of $1.76, for the quarter ending in December. This is higher than the $1.45 consensus estimate by 24 analysts surveyed. The quarter's revenue rose by 5%, to $24.69 Billion. This was slightly higher than analysts' expectations of $24.62 Billion. Operating income increased 31% over the previous year to $5.1 billion. Disney CEO Bob Iger stated in a press release that "overall, this quarter was a good start to the fiscal-year, and we are confident in our strategy to continue growth." Disney expects "high single-digit" growth in adjusted earnings per share in fiscal 2025, compared to the previous year. The streaming entertainment unit will also see an increase in operating income of about $875 million. The company announced that it would incur costs of $50 million to exit its Venu Sports joint-venture with Warner Bros Discovery, Fox and Warner Bros. After facing significant legal opposition, the media companies abandoned plans to launch a streaming sports service in January. The operating income of Disney's Entertainment division, which includes films, television, and streaming, increased by nearly two-thirds to $1.7 billion during the third quarter. This is largely due to "Moana 2"'s strong performance. The animated sequel, which was released on Martin Luther King Jr. Day in January, became the fourth Walt Disney Animation movie to achieve this financial milestone. Disney's traditional TV business has continued to decline. Operating income for so-called linear channels fell by 11%, to $1.1 billion. Disney+ subscribers fell 1% in the last quarter, to 124.6 millions. A price increase in October had caused a slight drop in subscribers, as the company warned. The company also predicted a slight decline in Disney+ subscriptions in the second quarter compared to the previous one. Disney+, Hulu, and ESPN+ all produced operating profits of $293 millions in the quarter. This is the third consecutive quarter of profitability, and represents a significant turnaround from the $138 million loss the previous year. Operating income in the Experiences segment was about the same at $3.1 billion. This includes consumer products, cruise lines, and parks. The hurricanes and cruise ship expenses caused a 5% decline in profit at domestic parks, but operating income at international park rose by 28%. The Sports unit, which includes ESPN and Star India, had an operating income of $247 million compared to a loss a year ago. This was due in part to the improvement in Star India’s operating results before Disney and Reliance Industries completed a deal combining their Indian media assets.
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Walt Disney exceeds its earnings targets thanks to 'Moana 2
Walt Disney's earnings for the third quarter of 2018 exceeded Wall Street's estimates by a wide margin on Wednesday. The results were boosted by "Moana 2's" strong performance at the box office during the holiday season and the higher profits made in the streaming business. The strong entertainment segment helped to offset the decline in Disney's domestic parks in Florida, which was impacted by Hurricanes Helene and Milton. In addition, the Experiences group led by the parks incurred approximately $75 million of expenses related to the launch of the Disney Treasure Cruise Ship in December. Disney has reported a 44% increase in adjusted earnings per share of $1.76, for the quarter ending in December. This is higher than the $1.45 consensus estimate by 24 analysts surveyed. The quarter's revenue rose by 5%, to $24.69 Billion. This was slightly higher than analysts' expectations of $24.62 Billion. Operating income increased 31% compared to a year ago, reaching $5.1 billion. Disney CEO Bob Iger stated in a press release that "overall, this quarter was a good start to the fiscal-year, and we are confident in our strategy to continue growth." Disney expects "high single-digit" growth in adjusted earnings per share in fiscal 2025, compared to the previous year. The streaming entertainment unit will also see an increase in operating income of about $875 million. The company announced that it would incur costs of $50 million to exit its Venu Sports joint-venture with Warner Bros Discovery, Fox and Warner Bros. After facing significant legal opposition, the media companies abandoned plans to launch a streaming sports service in January. The operating income of Disney's Entertainment division, which includes films, television, and streaming, rose to $1.7 billion during the third quarter. This is nearly twice the results achieved a year ago, thanks to "Moana 2" for its strong performance. The animated sequel, which was released on Martin Luther King Jr. Day in January, became the fourth Walt Disney Animation movie to achieve this financial milestone. Disney's traditional TV business has continued to decline. Operating income for so-called linear channels fell by 11%, to $1.1 billion. Disney+ subscribers fell 1% in the last quarter, to 124.6 millions. A price increase in October had caused a slight drop in subscribers, as the company warned. The company also predicted a slight decline in Disney+ subscriptions in the second quarter compared to the previous one. Disney+, Hulu, and ESPN+ all produced operating profits of $293 millions in the quarter. This is the third consecutive quarter of profitability, and represents a significant turnaround from the $138 million loss the previous year. Operating income in the Experiences segment was about the same at $3.1 billion. This includes consumer products, cruise lines, and parks. The hurricanes and cruise ship expenses caused a 5% decline in profit at domestic parks, but operating income at international park rose by 28%. The Sports unit, which includes ESPN and Star India, had an operating income of $247 million compared to a loss a year ago. This was due in part to the improvement in Star India’s operating results before Disney and Reliance Industries completed a deal combining their Indian media assets.
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MORNING BID AMERICAS - Alphabet mistakes, Yen surges and China returns
Mike Dolan gives us a look at what the U.S. market and global markets will be like today. As the tariff rollercoaster of the past week has leveled out, Wall Street is once again tilting down, due to a bad reception for Alphabet’s results, the lingering China tariff increase plans, and the fresh speculation about interest rate hikes in Japan. U.S. Stock Futures are back in red before Wednesday's bell, as Alphabet shares plunged by 7% over night. The drop was due to doubts surrounding the Google parent company's cloud computing, similar to Microsoft's last week, as well as anxiety over its massive investment in artificial intelligent, especially after last week's DeepSeek announcement. Alphabet, following the day before's slap from Beijing, which was a rebuke of an anti-monopoly investigation into Google in China, said that it would spend 75 billion dollars on its AI buildout, 29% higher than Wall Street had expected. It also missed its cloud revenue goal. Shares of Advanced Micro Devices dropped 9% overnight after its AI chip revenue did not meet expectations. The news about global macro-policy did not help, either. This week has seen a flood of updates on earnings around the globe. The yen rose to its highest levels of the current year after domestic wage data rekindled talks of another Bank of Japan interest rate hike in this year. The December real wages in Japan, adjusted for inflation, rose by 0.6% compared to the previous year. This was due to an increase in winter bonuses. Government officials expressed optimism that wage growth momentum is increasing. Kazuhiro Maaki, director general of the BOJ’s monetary affairs division, said in parliament that "we will continue to increase interest rates and adjust degree of monetary assistance, if the underlying inflation accelerates towards 2%, as we project." Chinese markets are back from the lunar new year holidays. There is a lot of information to digest, including the 10% tariff increase on Chinese imports this week, the planned retaliation by Beijing for Feb. 10, and the DeepSeek AI development. Both mainland China and Hong Kong's stock indexes dropped on Wednesday, as hopes that a meeting would be held between U.S. president Donald Trump and China’s president Xi Jinping in order to avoid a tariff war had been dashed. The U.S.'s plans to impose tariffs on Canada, Mexico and other countries were put off for a whole month after Trump made similar calls with the leaders of these countries. Trump said Tuesday night that he wasn't in a hurry to talk to Xi. Karoline Leavitt, White House spokesperson, told reporters that a Trump-Xi phone call was still to be scheduled. EMPLOYMENT NUMBERS The U.S. Postal Service announced that it would temporarily stop accepting parcels from China or Hong Kong, as Trump terminated a provision in the trade agreement used by Temu and Shein retailers to send low-value packages to America duty-free. In the background, surveys of the private sector showed that China's service activity expanded at a lower pace in January. The Lunar New Year holidays also worsened employment. Currency reactions were mixed. The onshore yuan was slightly weaker, as the People's Bank of China closely guided the currency after the holiday, but the offshore yuan grew for a second day. The dollar index was impacted by the combined gains of the yuan and yen. The 10-year Treasury note fell below 4.5%, and the dollar was also dragged down by a decline in U.S. Treasury rates. Treasury yields fell on a combination of trade war anxiety and the latest employment report, which showed that U.S. jobs openings were lower than expected in December. This takes the heat off the labor market, and gives the Federal Reserve more room to ease policy. On Tuesday, Fed Vice-Chair Philip Jefferson stated that he continues to see the level of monetary policies restraint being placed on the economy gradually decreasing as we move towards a neutral stance. "That being said, I don't think we should be in a rush to change our position." The two Fed cuts for this year have been priced out almost fully. They will resume around the middle of the year. ADP will release the private sector payrolls of January later on Wednesday, and Friday is when ADP releases its national payrolls report. Geopolitical tensions have also added to the trade war concerns. Trump's comments on the United States retaking Gaza has confused many, who thought he was trying to pull the United States out of foreign conflicts and withdraw expensive U.S. aid and military funds. The statement was confusing, just as it had been before with similar contradictions in currency and trade policy. Gold was the only asset that seemed to benefit from the uncertainty. It set a new record for gains this year, with almost 10%. The Nikkei reported that Nissan, a Japanese automaker, will end merger talks with Honda. This would have resulted in the third largest automaker in the world. Honda shares rose 8% and Nissan's fell 4%. The following developments should help to guide U.S. stock markets on Wednesday:
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Kyiv: IAEA delays rotation of mission to nuclear plant because of lack Russian guarantees
Ukraine's Foreign Ministry announced on Wednesday that the International Atomic Energy Agency has delayed the rotation of their mission to the Russian controlled Zaporizhzhia Nuclear Power Plant due to the lack of security assurances from Russia. A senior Russian diplomat rejected Ukraine's assertion. A Ukrainian Ministry spokesman stated that this was not the first instance the Kremlin used blackmail to intimidate and subvert the independence of international experts. "We won't allow Russia to undermine the Agency’s independence and neutrality to achieve their criminal goals," he stated in a press release. Russia captured Europe's biggest nuclear power plant soon after the full scale invasion of Ukraine in Febuary 2022. Since September 2022, the IAEA has sent staff to the facility. In a statement made on X by senior Russian diplomat Mikhail Ulyanov he accused Ukraine of lying in a report about the lack of security assurances. The Vienna-based diplomatic said that the Russian Ministry of Defence has provided "all assurances", while Ukraine is trying to introduce new requirements. IAEA Chief Rafael Grossi announced that he will visit Russia this week to discuss conditions in Ukraine and the Zaporizhzhia nuclear plant. Grossi said at a Kyiv press conference on Tuesday that it was essential for him to keep communication channels open in order to fulfill his obligations. He inspected a substation for electricity distribution during the visit and warned that an attack on Ukraine's grid could lead to a nuclear disaster by disrupting power supply. Moscow has repeatedly attacked Ukraine's infrastructure, including its substations. However, it has avoided direct attacks on the nuclear plants that produce more than half the country's power. (Reporting and editing by Anastasiia malenko)
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Aluminium and copper both gain while aluminium declines due to concerns about increased supply
On Wednesday, copper prices rose to their highest level in over a week due to a weaker dollar. Aluminium prices fell as raw materials prices dropped, raising the expectation of increased supply. The price of three-month copper at the London Metal Exchange was up by 0.1% to $9,160 per metric tonne at 1030 GMT, after reaching its highest level since January 27 at $9204. The dollar index was weaker, but the yen was stronger. The dollar is weaker, making commodities priced in U.S. dollars less expensive for buyers of other currencies. On the first trading day since the Lunar New Year holiday, the most active copper contract at the Shanghai Futures Exchange dropped 0.3%, to 75,290 Yuan ($10342.60), per ton. LME Aluminium fell by 0.9%, to $2.613.50 per ton. On Jan. 20 the metal, which is used for transport, packaging, and construction, was at its highest price in over two months, partly because of concerns about shortages and high prices of alumina, a raw material. "The bullishness of aluminium was overdone. "With alumina prices much lower, there's a very strong incentive to increase output", said Dan Smith. He is the head of research for Amalgamated Metal Trading. The price of alumina on SHFE has dropped by one-third this year, to 3,588 yuan a ton. This is after the prices reached record highs in 2017. Smith was also skeptical that the government's 45 million ton annual cap on aluminum smelter output in China would be strictly adhered to. I have a hunch it's not as secure as you think. It wouldn't be surprising to me if China's supply side surprised me on the upside." Other metals include LME zinc, which fell 1%, to $2,779.50 per ton, while lead rose 0.7% to 1,984, nickel climbed 0.4% to 15,335 and tin grew 0.9% to 30,530. Reporting by Eric Onstad. ($1 = 7.2796 Chinese Yuan). Editing by Jane Merriman
In 2025/26, the global sugar market is expected to shift from deficit to surplus.
Analyst Green Pool stated on Wednesday that the global sugar balance will shift to a modest surplus during the 2025/26 crop year, with the production expected to increase.
The Australia-based analyst for sugar and biofuels said that the surplus was expected to be 2.7 million tons in 2025/26 compared with the deficit of 3.7 millions in the previous season.
Analyst: "Global stock levels remain tight but will receive some relief from projected surplus," he said.
The global production is expected to grow 4.5% in 2025/26 to 202.0 millions tons, which will be the second highest total ever recorded. Brazil, India, and Thailand are all forecast to see an increase in output.
The sugar production in Brazil's key Centre-South region is expected to increase to 41.6 millions tons from 39.95 in the previous season. This is due to a higher proportion of cane being used in sweetener production, which has risen to 50.9%, from 48%.
Cane can be used for biofuel production.
The global consumption is expected to rise by 1.2% in 2025/26 to 198,3 million tons. This growth rate is the same as that of the previous season.
Green Pool forecasts are based upon crop-year cycles. The balance between consumption and production is adjusted to account for unaccounted disappearances. (Reporting and editing by Christina Fincher.)
(source: Reuters)