Fourth Quarter Results
Agribusiness Operating Profit
Results increased in most regions and areas of the business. Improved performance in South America and North America were driven by higher oilseed processing and grain origination margins and volumes. Higher distribution results were due to strong global demand and improved margins. Risk management strategies performed well during a volatile quarter.
Fourth quarter results included $25 million of impairment and restructuring charges relating to the closure of oilseed processing facilities in Europe and the U.S. The closure of the European processing plant is a continuation of our strategy to improve the efficiency of our asset footprint in Eastern Europe. The U.S. processing facility was older and high cost. The attached grain elevator will continue to operate.
Fertilizer Operating Profit
The strong performance in fertilizer was due to higher margins, which benefited from higher international fertilizer prices. Selling prices in South America are based on international prices and include the cost of transportation and other import costs. As expected, demand for fertilizer products slowed in the fourth quarter after above trend-line volume growth in the first half of the year, when farmers accelerated purchases because of favorable agricultural commodity prices and concerns about increasing crop input costs.
Fourth quarter results included a $50 million increase in our
value-added- tax provision, resulting from a change in tax laws in several
Brazilian states that will take effect in 2008 and will make the
recoverability of these taxes uncertain.
|SOURCE Bunge Limited|
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