Bunge Ltd Q2 2016 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Sandy Klugman - Vertical Research Partners - Analyst : Good morning. Thank you. Soren, in the US on-farm storage for both corn and soy remains at pretty elevated levels. Do you have any expectations for how the environment for storage evolves going forward? And whether or not we will see more willingness on the part of growers this to originate crops at current levels?

Question: Sandy Klugman - Vertical Research Partners - Analyst : Great. A follow-up. Last week I was at an industry conference. There's a lot of focus on which presidential candidate is more likely to support the passage of the Transpacific Partnership. I was wondering if you had any views on which candidate might be more likely to support the passage of the Bill? And whether or not you view that as being a potential driver for Bunge going forward?

Question: Sandy Klugman - Vertical Research Partners - Analyst : No, understand entirely. Thank you.

Question: Cornell Burnette - Citigroup - Analyst : This is Cornell Burnette in with a few questions for David.

Question: Cornell Burnette - Citigroup - Analyst : Great. Just on the quarter, you had mentioned a number of things regarding the agribusiness segment and the outlook. It appears from your comments that many of the headwinds encountered in agribusiness in South America from Q2 are expected to carry over into 3Q. Given that Q3 also possess the negative impact of the mark-to-market reversal, should we expect that overall 3Q profits in agribusiness will be down relative to what they were in the second quarter?

Question: Cornell Burnette - Citigroup - Analyst : Okay. And then back on the first-quarter call and earlier in the year I know there was a good amount of optimism for crushing results out of Argentina. It seems like things changed really quickly during the second quarter. I was wondering if you go into it a little bit deeper and just explaining kind of what are some of the pieces that moved in the second quarter that basically changed the outlook for Argentine crushing?

Question: Cornell Burnette - Citigroup - Analyst : Okay. Very good. Thanks a lot.

Question: Adam Samuelson - Goldman Sachs - Analyst : Great. Thanks. Good morning, everyone. Soren, I want follow up on some things you talked about with the third quarter maybe looking similar to 3Q (sic). Just taking a step back, I know you've given the guidance for EPS growth. You've given the segment -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 28, 2016 / 12:00PM, BG.N - Q2 2016 Bunge Ltd Earnings Call the other segments, which all are growing year on year. Should we take it that there will not be earnings growth in the agribusiness segment this year? If so, can you talk about the key areas that are down? I presume it is Brazil origination, but maybe talk about the variances within what sounds like an EBIT decline for the full year in agribusiness?

Question: Adam Samuelson - Goldman Sachs - Analyst : Okay. And then maybe a separate but somewhat related question. You had some pretty sharp reductions year to date on the SG&A line. Second quarter notably was down 16%. A lot of that was in agribusiness, mitigating some of the gross profit pressures. Can you talk about the sustainability of those reductions? I guess some of it might be currency related. But thinking about that SG&A outlook moving forward and the potential earnings leverage it gives you in a better farmer selling or crush margin environment in 2017 or 2018.

Question: Adam Samuelson - Goldman Sachs - Analyst : Got it. If I could just squeeze one more quick one in. The AMAGGI port JV, the business in Asia. Can you -- any financial impact of -- whether cash inflow our earnings impact of these JV actions?

Question: Adam Samuelson - Goldman Sachs - Analyst : Okay. I'll pass it on. Thanks.

Question: Ann Duignan - JPMorgan - Analyst : Hi. Good morning. Could you talk a little bit about Brazilian farmers' access to working capital? What are we hearing down there in terms of their ability to borrow or banks' willingness to lend? Just a little bit of color, please.

Question: Ann Duignan - JPMorgan - Analyst : Okay. That's helpful. Thank you. Could you address the fact that the world is awash in wheat and what that might do to demand for corn or other commodities? Given where wheat is grown around the world, what does to your business net/net? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 28, 2016 / 12:00PM, BG.N - Q2 2016 Bunge Ltd Earnings Call

Question: Ann Duignan - JPMorgan - Analyst : So net/net no negative impact on margins or volumes?

Question: Ann Duignan - JPMorgan - Analyst : Okay. That's helpful. I leave it there. Thank you.

Question: Vincent Andrews - Morgan Stanley - Analyst : Good morning, everyone. Just wondering if you could dimensionalize, looking at the grains performance year over year. Presumably a fair amount of that has to do with that dislocation you just referenced in terms of South America being short corn. How much of a driver was that of the grains performance in the quarter?

Question: Vincent Andrews - Morgan Stanley - Analyst : Okay. And then in Argentina, your reference to (inaudible) export tariff reductions, supposed to happen over a series of years. There's been some chatter recently that maybe given the movement in the currency and the commodity price and the resulting impact, favorable impact on farmer income, that maybe they're not going to reduce the export tariff as fast because the government needs the money. Do you have any thoughts on that just in general? And is that something you're hearing is impacting the farmers' desire to monetize their crop?

Question: Vincent Andrews - Morgan Stanley - Analyst : Okay. Maybe just lastly as it relates to cash flow. I might have missed it, but did you give a CapEx forecast? Also, how should we be thinking about cash flow from operations? It is obviously negative year to date, but with the move in the commodity prices, with they since come down. Do think we will be positive or negative there?

Question: Vincent Andrews - Morgan Stanley - Analyst : Sure. Understood. Appreciate it very much. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 28, 2016 / 12:00PM, BG.N - Q2 2016 Bunge Ltd Earnings Call

Question: Farha Aslam - Stephens Inc. - Analyst : Good morning. Could you just share with us, farmer selling in Brazil. If they choose not to sell it in the third quarter, is it simply a timing issue where you will realize those earnings in later periods? Or will those earnings opportunities decline if they choose not to sell it in the third quarter?

Question: Farha Aslam - Stephens Inc. - Analyst : Okay. So it's just an issue of timing?

Question: Farha Aslam - Stephens Inc. - Analyst : Okay, that's helpful. The second one is on Brazil and Eastern Europe. Your businesses there in oils and -- are struggling. Could you share with us kind of actions that you are taking, independent of economic recovery, that could help profits going forward? What kind of profits do think you can see an improvement of without a full economic recovery going into next year?

Question: Farha Aslam - Stephens Inc. - Analyst : That's helpful. If I could sneak in one more. It's on Chinese crush margins. Have you seen any improvement coming into the third quarter on the Chinese crush? And what's your outlook for Chinese crush?

Question: Farha Aslam - Stephens Inc. - Analyst : That's helpful. Thank you.

Question: Ken Zaslow - BMO Capital Markets - Analyst : Hey, Good morning everyone.

Question: Ken Zaslow - BMO Capital Markets - Analyst : Just two or three questions. The first one is, this is the second quarter in a row that you've cited risk management as a contributor to your earnings. I'm curious. Are you seeing things that are getting better there? Are you guys doing anything different? Because there has been several years that maybe you didn't cite that as the opportunity. Can you just talk to that a little bit?

Question: Ken Zaslow - BMO Capital Markets - Analyst : Okay. My second question. I know where -- everybody's talking about 2016. When I think about 2017 and beyond, if I take a step back you see all of this protein production coming online, be it chickens, being cattle and hogs come online. Is there a structural set up where your margin structure for crush margins maybe actually structurally higher and more sustainable? Is there case to be made for that, and can you talk to that?

Question: Ken Zaslow - BMO Capital Markets - Analyst : I don't want to hold you to this, but how do think earnings progress over the next couple of years? I know couple of years ago you kind of talked about the $8. And I'm not saying that you're going to be held to that. But do you think you're back on track on that? Do think there's a set up for you? Do you need more external factors to help you out, or is there enough internal actions that are being taken? How do you frame it? Again, not just for this year but a little bit longer term?

Question: Ken Zaslow - BMO Capital Markets - Analyst : I appreciate it. Thank you.

Question: Brett Wong - Piper Jaffray & Company - Analyst : Hi. Thanks, guys, for taking my question. First, I wanted to ask your thoughts on the Brazilian political front and the impact to agribusiness and foods in the region if, kind of when the new government's going to place there?

Question: Brett Wong - Piper Jaffray & Company - Analyst : Great. Thanks. On the sugar business, obviously things have improved there. Just wondering your thoughts on the potential asset there. Obviously since they've improved, there's not a lot of pressure on timing. But any progression you've seen there is helpful.

Question: Brett Wong - Piper Jaffray & Company - Analyst : Okay. Fair enough. Thanks a lot, Soren. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 28, 2016 / 12:00PM, BG.N - Q2 2016 Bunge Ltd Earnings Call