Bunge Ltd. (BG:US), the world’s second- largest publicly traded sugar processor, said Chief Executive Officer Alberto Weisser will retire and be replaced by Soren Schroder, the head of its North American unit.
Weisser, 57, will step down June 1 and has been appointed executive chairman through the year-end, the White Plains, New York-based company said in a statement today.
Schroder, 51, joined Bunge in 2000 after working at Continental Grain Co. and Cargill Inc. The announcement of his appointment came the same day that Bunge posted its biggest quarterly loss in at least a decade. Its sugar and bioenergy unit, which processes sugarcane, had a loss before interest, taxes and one-time items of $118 million in 2012, compared with $20 million a year earlier, on negative ethanol margins and as dry weather reduced yields. Bunge fell 9.1 percent in New York.
“The sugar business has been challenged,” Schroder said in a telephone interview today. “We have to make that business perform. I will be diving into that deeply, starting now.”
The unit, which made up 10 percent of Bunge’s 2011 sales, is expected to have enough cane this year to operate at full capacity for the first time, the company said. It may achieve a goal of $8 to $10 per ton in earnings before interest and taxes in 2014, Schroder said.
As well as sugar, Bunge trades and processes soybeans and other agricultural commodities. Strengthening its agribusiness and food activities and improving supply-chain and logistics operations also will be priorities, Schroder said.
Fourth-quarter profit excluding one-time items was $2.61 cents a share, Bunge said. The average of 10 analysts’ estimates compiled by Bloomberg was for $2.35. Sales rose to $17 billion from $15.7 billion, trailing the $18.8 billion average of eight estimates.
“Nearly every division at Bunge underperformed our expectations with agribusiness and sugar leading the pack,” David Driscoll, a New York-based analyst for Citigroup Inc. who has a buy rating on the shares, said in a note today.
Bunge closed at $72.12, the biggest drop since July 2010.
Weisser’s retirement is “absolutely not” connected to the fourth-quarter results and 2013 will be a “very good year,” he said in an interview.
Weisser said he doesn’t regret buying the sugarcane mills in Brazil and sees “opportunities that are extremely interesting” in the country, such as co-generation.
“The biggest problem is we didn’t have the cane available,” he said.
The last two years were the worst in almost two decades in terms of growing the crop and to improve supplies Bunge planted 70,000 hectares of cane in 2012, he said.
Under Weisser, Bunge completed 41 acquisitions valued at $3.7 billion, according to data compiled by Bloomberg. He said Bunge has been “a very disciplined acquirer” and the recent round of takeovers in the agricultural-processing industry have been “very expensive.”
Schroder said that like his predecessor he plans to continue to use acquisitions as a key part of Bunge’s strategy to strengthen its main businesses and improve returns. He declined to comment on specific regions or products the company may be interested in.
The new CEO, who has a B.A. in Economics from Connecticut College, will relocate from St. Louis, the company said in a separate filing. He will be paid a $1 million base salary and an annual performance-related bonus of as much as 140 percent of his regular pay, according to the filing A long-term stock incentive plan of $3.8 million will be proposed to Bunge’s compensation committee next month, the filing shows.
Germany’s Suedzucker AG is the world’s largest publicly traded sugar producer, according to data compiled by Bloomberg.
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