Bunge cutting costs, restructuring as grains glut stings

Reuters




(Adds restructuring details, CEO comment, share price)
    By Karl PlumeCHICAGO, July 19 (Reuters) - Agricultural commodities trader
Bunge Ltd <BG.N> said on Wednesday it was cutting costs and
restructuring its global operations in response to tough market
conditions, sending its shares lower in after-hours trading.
    Bunge, which was targeted for a possible takeover by
commodities trader Glencore Plc <GLEN.L> in May, said it would
cut capital expenditure targets for 2018 and 2019 and that its
second-quarter profit would fall below the range of analyst
estimates.
    Massive global grain stockpiles and low prices following
four years of bumper harvests around the world have dragged down
profits for Bunge and other global grains traders. Companies
have tried to diversify away from commodities trading through
asset sales and buying higher-value businesses like flavorings
and natural ingredients.
    Bunge expects its plans would reduce overhead costs by $250
million once the plan is fully implemented by the end of 2019.
    Limited farmer sales of crops in South America, home to a
large share of Bunge's elevators and processing plants, squeezed
margins for the company's agribusiness division, its largest in
terms of revenue. Farmers are holding back supplies in the hope
of better prices for their crops.
    "Market conditions during the second quarter were
challenging, driven by unprecedented farmer retention in South
America, which pressured margins throughout the chain," Chief
Executive Soren Schroder said in a statement.
    The company scheduled a conference call to discuss the plan
on Thursday at 11:00 a.m. EDT (1500 GMT).
    Bunge shares fell 3.4 percent to $76.00 in after-hours
trade.

 (Reporting by Karl Plume in Chicago; Editing by Tom Brown and
Richard Chang)
 ((karl.plume@thomsonreuters.com; +1 312 408 8704; Reuters
Messaging: karl.plume.thomsonreuters.com@reuters.net))

Keywords: BUNGE OUTLOOK/ (UPDATE 1)





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