Bunge Global S.A. (BG) Q3 2012 Earnings Report, Transcript and Summary

Welcome to the Q3 2012 Bunge Earnings Conference Call. My name is Kim, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Mark Haden. Mr. Haden, you may begin.

Thank you, Kim, and thank you, everyone for joining us this morning. Welcome to Bunge Limited's Third Quarter 2012 Earnings Conference Call. Before we get started I want to inform you that we have prepared a slide presentation to accompany our discussion. It can be found in the Investors section of our website, bunge.com, under Investor Presentations. Reconciliations of non-GAAP measures disclosed verbally on this conference call to the most directly comparable GAAP financial measure are posted on our website in the Investors section. I'd like to direct you to Slide 2 and remind you that today's presentation includes forward-looking statements that reflect Bunge's current views with respect to future events, financial performance and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bunge has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation and encourages you to review these factors. Participating on the call this morning are Alberto Weisser, Bunge's Chairman and Chief Executive Officer; and Drew Burke, Bunge's Chief Financial Officer. I'll now turn the call over to Alberto.

Good morning, everyone. We had a good third quarter. Agribusiness results were solid, and I'm especially pleased because it was a very balanced performance, with contributions from all geographies in all product lines. We now have 6 years of strong growing consistent performance in Agribusiness as a consequence of our approach to growth, which has focused on expanding in 3 areas: geographies, portfolios and value chains. This approach is one that has made the business balanced and resilient through changing conditions and difficult market environments. I'm also pleased that Food & Ingredients and Fertilizer showed improved performance from the challenging first half of the year, and results in Sugar & Bioenergy, on a comparable basis, were higher than last year, but below the potential of this business. Our continued sugarcane planting and other cost reduction efforts, which will result in increased sales volume and lower unit cost, will help us realize this potential. We are making steady progress and remain optimistic for a strong performance in the 2013 crop year. Regarding the continuing effects of the U.S. drought, the current market environment has been and will continue to be volatile and complex for everyone who participates in our industry, including farmers, processors and the livestock industry. Stocks of corn and soybeans are tight, and as a result, the world is adjusting to typical trade flows. Bunge's role is to help farmers and customers manage through this environment by providing market access for crops and delivering the right products when and where they are needed. We have the core strength, geographic balance, a diverse product portfolio, an experienced team and a strong balance sheet that will enable us to fulfill this role effectively and profitably. The world needs record crops to rebuild stocks, and today's high prices are sending a strong signal to farmers, especially in South America, to plant. Early indications are that soybean production will be at record levels. And as new crops are harvested, we should see a more balanced supply/demand situation, which will be good for consumers and for the market overall. I will now turn the call over to Drew, who will take you through the quarter and our outlook.

Thank you, Alberto. Let's turn to Page 3 and our earnings highlights. Our total segment EBIT for the quarter was $441 million versus $191 million in the prior year. This result was driven by a strong performance in Agribusiness with the third quarter EBIT of $406 million versus the prior year of $149 million. Earnings were strong across all geographies in both our oilseed processing and merchandising businesses. Oilseed processing results were good in all regions, with significant year-on-year improvement in North America, Europe and Asia. Grain origination results were particularly strong in South America, and our distribution business in Europe, the Middle East and Africa performed well. Our Agribusiness volumes continue to show growth with a 15% increase over the prior year quarter to 35.8 million tons. On a year-to-date basis, volumes have grown 19% to 101 million tons. This growth has been primarily driven by our investments in North American grain handling and port assets and our European origination and distribution businesses. Our Sugar & Bioenergy business recorded a loss of $47 million in the quarter. This amount includes an impairment charge of $39 million related to a U.S. corn ethanol joint venture. Without this charge, the business recorded a loss of $8 million as a profit in our industrial business was offset by a loss in our merchandising business, where we didn't generate sufficient gross margin to cover our operating costs. Both of these businesses performed better than the prior year. Our continued focus on increasing capacity and utilization and reducing costs is producing results. According to UNICA, the Brazilian sugar association, mills in the center-south have seen a reduction in cane milling volume of 8% through September 30. By contrast, the Bunge mills have increased their production by 13%. We remain on target to crush between…

[Operator Instructions] And at this time, we have a question from Christine McCracken from Cleveland Research.

Just on this port -- continued port congestion issue, it's been a problem getting fertilizer in and sugar out. I'm just wondering, with all of the disruption and congestion already and then some of the damage that's been done to some of the ports, how are you going to move this record crop out of South America? It's already a problem when we're dealing with smaller issues.

I would say that this year was unusual because we had these 2-month strike of many federal agencies that only made it worse. So we had planned for a certain behavior. But the strike made it really worse. So as we look into the new crop, I'm sure there will be some issues. But at the same time there are more and more new avenues of exports. So especially, there's more of the products flowing north through the rivers of the Amazon out and through Victoria through San Francisco do Sul. I think there will be an issue, but assuming that there is no strike from any agencies, we should see a logistic flow that is okay.

And isn't there a strike every year, though? It seems like, at least, over the past several years, it seems like we've had one? Is it just longer?

This one especially unfortunate because it was in the high season of fertilizer, the high season of the sugar movement. So I hope there's none when we export soybeans and corn next year.

Yes. I think, Christine, it's going to be difficult on the industry and the country to move all the product. Brazil is, as you said, is subject to congestion. I think you hear our confidence because we have a pretty good interior network, as well as a network at the port. So we have not only the logistic channels that we can rely on to move the product, we also have pretty good storage if we have to hold product a for a little while. So I think when we look at our overall system, we think we've prepared well to handle it. But as a country and an industry, there's no doubt there'll be some difficulties.

And then just one follow-up, on ethanol they've been exporting quite a bit of ethanol out of Brazil into the U.S. I'm curious if now that the government looks like they're going to move that blend back up to 25% in the spring, if that changes in your view.

Overall, the prices for hydrous ethanol worse than the anhydrous. So the changing of the blend will be positive. Now the exports also anhydrous, so what will happen is whatever -- wherever the price is more attractive, I think everybody will start shifting more from hydros to anhydrous. So if the export market is more attractive, you will see more export, and if -- with a blend. If the domestic one is more interesting, we will see more local sales. So the good news is this -- both of them are positive.

Our next question comes from Vincent Andrews from Morgan Stanley.

I know you don't want to give guidance, but can you just sort of talk about the level of performance particularly in Agribusiness this quarter? And as a lookout over the next few quarters, is this about what we should expect within sort of a normal range of sensitivity for your business?

Vincent, as you said, we don't give guidance. I think what we would say is as we look out the next 6, 9 months, which is where we have the most visibility, we do see a very good macro environment for Agribusiness. As we said, it will shift from market to market and probably will move earlier in the next year from North America into South America then it's typical because North America's going to add a short crop, and it's really going to have to step up here in the fourth quarter and the first quarter to handle the shipments. So when we look at the overall environment for Agribusiness, it feels very good, and we expect Agribusiness to continue to perform well.

Okay. And you're not seeing anything on the demand side because of the high prices in any of the markets that's, at all, concerning?

No. I think we factored it all to into our plans. I -- You know as well as we do that there's been a little bit of a decline in meat production in the U.S. over the last months. But that seems to have flatten out a bit, and the demand out of Asia remains pretty strong. So overall, we don't see a big shift in demand, unless there something happens in the macro environment that would change the situation dramatically. But right now, demand seems to be reasonable and to be continuing.

Okay. And then just last question, on the volume increase, particularly maybe the port and some of the new infrastructures, is there anything different about sort of the unit economics or the margin opportunity with the port asset relative to a grain elevator sort of what we consider to be sort of your core business? In other words, is it a higher-margin sale? Is it -- are those margins less variable? Is there anything we should know about this volume growth that you're bringing online?

No. I think the 2 -- the biggest one coming online now is the PNW terminal in the West Coast in the United States. And that comes with both grain origination business in the interior, and it comes with port elevation. So you have 2 sources of income, you get the origination margin and you get the elevation margin. But I wouldn't say there's anything special about that. And you've had the same kind of development in Eastern Europe where we now have the port of Nikolayev and are doing more origination in the country. So I wouldn't say there's anything special, but it gives us a chance to provide a full chain worth of services and make money across the chain.

So you get to double-dip on the same bushel basically?

Yes. But if I understood your question correctly, obviously on merchandising, the whole origination, elevation merchandising, the margin per ton is slightly lower than processing because you also have less investment in assets.

Our next question comes from Ken Zaslow from Bank of Montréal.

In terms of the quarter on the Agribusiness side, can you talk about what the key drivers and kind of -- I know you won't quantify exactly, but kind of at least rank or give us a little idea of what were the key drivers. Was it with the crush margins in the U.S; that you had good ownership of soybeans in South America; that you had exports out of South America? Can you just kind of give us at least a qualitative -- if can you give us quantitative, that would be fantastic. But what can you tell us a little bit more about this quarter?

It really was an excellent quarter in the sense that every region and every product line performed well. So we had good performance in South America with processing and origination. We had good improvement in margins in the Northern Hemisphere. So North America, Europe performed well. So it was everywhere. It is not one silver bullet. It was -- everything was doing -- was performing well, the merchandising business, distribution, origination. So I'm sorry to tell you, there's not one answer, it's many. So I think that's also the power of what we have built over the last many years, that it is very well-balanced.

Did you have -- did you participate in the corn exports out of Brazil? Was that a big part of it?

Very important component, yes. We're a large player in that.

And how long did that continue through?

It's ongoing.

Okay. So that should continue into this quarter that we're in right now? [indiscernible]

Yes, and -- yes, that's correct.

And then the ownership of your soybeans in South America, are they kind of dwindling down and now it's really going to be a U.S. crush margin environment in terms of going for the next quarter?

Absolutely. And now -- the next 2 quarters is mainly the Northern Hemisphere. It starts in Northern Brazil, the harvest in early January, but the volume of the business now is the Northern Hemisphere. We are processing what was harvested, both in North America and Europe.

How long will the North -- can you give us a relative idea of like historically, how long do you get the good crushing margins out of North America, and how much do you expect it to be this year?

It's all about the -- the issue is going to be the demand. We are surprised how strong the demand from the meat sector is. But obviously, the supply is tight. So the question mark is going to be how -- at the end of the first quarter, where is the demand going to be?

Okay. And then are you going to sell the Fertilizer business?

We don't comment on these kind of things.

Okay. And my last question is gross profit. Can you talk about gross profit dollars on merchandising business? How it's actually trended for the last couple of years, and have you -- do you think that you've actually reached more of a steady state at this higher level?

I think the overall answer to your question is yes, Ken. We've continued to expand the volumes we've done, and we've got a network that can produce good margins. I would also, though, just add that it's never straight line in Agribusiness, as you know. So you always get a little bit volatility quarter-to-quarter and where the margin is in the train. But I think we've continued to expand our capacities and our capabilities. So I think if you look at the underlying trend in our merchandising business, it's very positive, and the growth is there, and we expect it to continue.

Right. I would just -- Ukraine, are we -- is there any worries that they have the exports? Do you guys have any problems with having too much wheat that can't exported? Are there any issues in Ukraine for you guys?

No, it was pretty much expected. The market expected it. It was overall very well coordinated. So we don't -- the volumes were as expected and good, and the transition to the reduction in exports, there's no real surprise here.

Our next question comes from David Driscoll from Citi Research.

This is Cornell Burnette calling in with a question for David. And then if I'd start off here, I'd like to ask about Agribusiness. You obviously did very good in the quarter in crush margins and grain merchandising. I think a lot of that's driven by the opportunities that you had from just tight global supplies of grains. Alberto, can you talk about what happens, I think, early in 2013, when the U.S. crop starts to dwindle a bit and globally, supplies really tightened from where they are today? Does that give Bunge the opportunity to get maybe even more kind of special opportunities relative to what you had in this quarter?

The situation will allow Bunge to play its strength because of our large presence in South America. And we have been very active in filling our pipeline so that we can start earlier than usual with the production and exports from South America. So if necessary, if the North American supply dwindles earlier because of strong demand, I think we can kick in with the South American supply. So we are preparing for this situation. So it should be a good transition, and we should play an important role here.

Okay, very good. And on Fertilizer, you guys are profitable, but maybe considering that you -- we've got tight global grain supplies and high grain prices, it would seem that maybe you could have done even better than what occurred in the quarter. Can you give me any color on maybe why results weren't better? And then moving forward with the fact that you're expecting record -- a record crop, and we really need a record crop coming out of Brazil, is there the opportunity to get material increases in profitability in Fertilizer on a sequential basis as we move into the fourth quarter and into the first quarter next year?

I would say that the main reason is that the quarter was very complicated with the port issues. And there was significant longer delays to unload the ships. That created really a havoc because this is the most important time of deliveries to the farmers. In addition, some of competitors got nervous and unloaded inventory faster. And so it was a very complicated quarter. So volumes were lower and also margins were lower. And we do not expect this to be repeated. So we expect this to stabilize.

So do we think that maybe you could see some profit potentially shift between the third quarter and into the fourth quarter in Fertilizer?

The fourth quarter is an important quarter, but it's also the end of the season, so we expect it to be well.

Our next question comes from Christine Healy from Scotiabank.

First question I have is for you, Drew. Just a comment that you made at the Investor Day last month. In Agribusiness, you were indicating that volume growth in the second half of the year would slow significantly from the first half. I think you gave an 8% as an approximation. And that was from 22% growth in the first half. So you had a great quarter this quarter. Volumes, I think, were higher than what people expected. Should we expect margins to fall off in the fourth quarter, or has your view changed since your Investor Day?

I think our business has stayed pretty strong. I think we will have volume growth in the fourth quarter because we'll have PNW for the full harvest this year, so that will help somewhat. The reason we -- what I was trying to say at the Investor Day, I don't remember exactly what I said, to be honest, the exact words, is in the first quarter in earlier in the year, we had that 19 type -- percent type of growth. We were somewhat, because of our activities and our new investments as a major part of it, it was also partly because you had a drought in the Black Sea region in the year before, and there was additional quantities were there this year. So part of the 19% came from there, and I think we are trying to set the expectation we couldn't continue at those 20% rates. But as you can see, our volumes have been stronger than I said on that, the number you were quoting. And I think we'll have strong volumes in the fourth quarter. I don't want to get into predicting any fact that's...

That's fine. That's just what I wanted to know. And then on the same lines in Fertilizer, you said that you expect the segment to recover first half losses in the second half. Is that still the expectation? Because I think with Q3, that would require Q4 to be quite a bit higher.

It's -- that would be a stretch to get there at the moment. I mean, the business is moving the right way, but we're a little bit lower the third quarter than we'd thought. So with that, I don't know that we're going to recover all of that this year.

Okay. And just the last question, can you guys talk about, I guess, what regions would you focus on growing in grain origination? What are some of your focus areas that you'd be looking at right now?

We continue expanding in the regions we are present as you have seen in North America, in U.S. with the EGT, the Pacific Northwest terminal, which also meant that we expanded our grain origination in North America. The same we are doing in South America, in Eastern Europe. So we are growing organically. What is new is we are expanding both in Africa and in -- we are making investments in Australia and also expanding now our grain origination in Canada. So the business continues growing in geography and in products.

Alberto, you knew someone had to ask you the question about Australia, so that is a market that you're interested in growing in.

Yes. We have been present without assets, but now we are moving.

Our next question comes from Tim Tiberio from Miller Tabak. Tim J. Tiberio - Miller Tabak + Co., LLC, Research Division: I guess my question is on oilseed demand, we're hearing reports that China may be stepping in and ramping up imports of palm oil with the recent decline in prices. How should we look at that? Is that a risk for substitution between soy oil and palm oil on the demand side, or is it just the fact that across the overall oilseed complex, supplies are so tight that this is really not going to become potentially a substitution issue over the next few quarters?

I would say generally from an impact on Bunge, it's not that relevant because we operate in all the oils. And on soybean, we have to remember that one of the soybean meal pod is even more important than the oil side. So these kind of movements happen from time to time. We also have a shorter rapeseed crop and canola crop. So you have movements in which oil is more abundant than others. So at the moment, we have one which is the palm oil. So you see different flows, and it's reflected on prices. But remember, we work on margins in general. So we can -- mix had changed some of the oils we work with, should not have a significant impact on us.

Our next question comes from Ryan Oksenhendler from Merrill Lynch.

Alberto, just in regards to a previous question, you answered about growth in origination. You talked a lot about it sounds like greenfield projects, but there's been a lot of consolidation in the industry, and it seems like there's more to come. So I guess, one, do you feel like there will be more consolidation in the industry? And then second, where does Bunge stand in terms of M&A opportunities?

I do believe that we have more consolidation because we have shown that the market has shown that it is necessary to have large companies with a significant geography spread and strong balance sheets to operate and serve the markets in these volatile times. And so we expect them to continue. And we are part of it, but at the same time we have shown we are disciplined operators. So when we do acquisitions, they have to meet our hurdle rate. If they are too expensive, we will not move and then we prefer to do either greenfield over a longer period of time. So just remember that over the last 15 years, we have increased 10x in size. And that was a lot in terms of acquisitions as well. But if it's too expensive, we will pass.

Okay. And then just in terms for ethanol, how much shifting can be done from the industry from hydrous to anhydrous? Are there any limitations on that?

There are limitations because you have to do investments. And so there have not been a lot of investments. So we have done some, but anyway, it's also signal of pricing. So I don't expect a significant move there...

So you don't expect to see a significant shift.

Yes. We will because we have made investments in the past, but the whole industry will have very little shift.

Got it. And then for next year in terms of pricing for ethanol and sugar in general, I know you guys are planting a significant amount. But are your competitors -- and if not, then do you see a possible increase in -- or decrease in supply or an increase in pricing for next year?

Overall, we all are expecting an increase in supply next year. And obviously, some more, some less. We probably are the ones that have, on a relative basis, have the biggest increase in planting. And we really -- our focus is to become profitable and getting close to our cost of capitals, even with this kind of environment, these kind of prices. Hydrous ethanol prices are a little bit too low at the moment. So all we can do is reduce our unit cost, and we are doing this as fast and focused as we can. So that is our focus.

Okay. And then just one last one to follow-up on Ken Zaslow's question. I guess how long will the Brazil corn exports last? And I guess how much supply is there?

To be honest, I don't know the details, there's something left, but very soon you will have the summer crop starting. So...

Yes. The winter crop will probably be -- the exports will probably be completed in the fourth quarter is my thought. But again, I don't know the precise date.

And now is the time for the Northern Hemisphere. We have -- interesting, we are starting -- we are also exporting corn from Ukraine, which is a new one, something new.

Our next question comes from Ian Horowitz from Topeka Capital Markets.

First of all, can you give us a little bit of an update on the situation in Argentina with the cereals registry?

There is no relevant change. This grain registry is not a significant impact for us because it's more about domestic trading. So which we are not an important player. So there's no significant change.

Alberto, there seems to be kind of a discrepancy between what you guys are accounting for in terms of exposure to this issue financially and what the Argentine government is saying that you are kind of -- are on the hook for. I'm sure that there's going to be some sort of kind of sit down and come to an agreement. But just maybe some indication of how this process may work in terms of getting to some sort of agreement. Will this be something like that's going to happen over time and sort of step functions or will there be...

First of all, I think our accounting for this is absolutely correct, and we've made all of the disclosures around this issue in our SEC filings. So we've disclosed what has happened. We believe that the tax positions we've taken are absolutely correct, and we plan to defend those position vigorously.

Okay. And then you talked about in the press release a little bit of weakness in the edible oil market in North America. I think that's how the sentence read. Can you just give us just a little bit more color on where that weakness was either in the processing chain or in geography?

It is nothing unusual, but I would say it is a couple of things mainly around food service. And -- but it is not something that we are worried about too much. It's also our ramping up of our margarine production. We shut down one plant from the acquisition we did in the past [ph] -- C.F. Sauer's plant, and we moved it to another one. So these are small -- how should I say, nothing structural. This should change.

Okay. And then one last question, you talked about, still in oilseeds, the benefits from acquisitions. If you strip out acquisitions, can you comment a little bit more on the performance of the legacy business?

Are you referring to the Edible Oils business that we mentioned the comments on?

Yes, absolutely.

Yes. It's the Food acquisition.

You -- there's one -- obviously, we had the benefit last year of a sale of a plant in Canada. And this year, all the acquisitions are contributing, the ones in India and Brazil and even in the U.S. So all of the acquisitions are contributing and are delivering as expected in year one. They are not yet at full run rate as you ramp up acquisitions, it takes time, integration. So onetime's item, but they are in line with our expectations.

Right. I guess understand that. What I'm trying to kind of figure out is the business, if you kind of look at Edible Oils without the acquisitions, were you seeing significant market penetration?

They were -- excluding the gains on sale of assets, they were improved versus last year.

Yes. I think our underlying Edible Oil business is performing well sequentially. Both Brazil and in Europe had a good third quarter and have shown improvement. And they were not -- you have those -- those results were not driven by acquisitions, but major contribution from the acquisition was in India and then somewhat from the tomato business in Brazil. But the core base Bunge business has performed -- or traditional Bunge businesses performed well in the quarter.

Our next question comes from Christine McCracken from Cleveland Research.

Just wanted to follow up on these heavy rains in southern Brazil and Argentina. Curious how you think it will impact the timing of the harvest and whether or not there'll be kind of some -- is that's good for you to have it delayed in some way or is it immaterial? And then generally what you think about wheat -- the wheat quality out of Argentina as a result of the rains?

I would say it's immaterial and as expected. So these kinds of things happen. So let's say it for a lot of rain is perhaps, not so good for wheat, but it's ideal for soybeans. So the weather market is too early to talk about it. Weather in South America really becomes more relevant, January, February. So at that moment, there's no concern from our side.

And not on wheat quality either?

Yes. On wheat, yes, but if you have change in wheat, that will have an improvement for soybeans. So these kind of things happen. South America, remember, is a little bit different than North America. You have much wider geographies from North to South and from East to West. So we have -- every year, we have some issues somewhere. So at the moment, we are not concerned.

Our next question comes from Robert Moskow from Crédit Suisse. Robert Moskow - Crédit Suisse AG, Research Division: You'll have to forgive me if someone touched on this already, but I noticed that chicken egg set data in the U.S. is tracking down again. I would imagine there's going to be reductions in the pig herd as well. I wanted to know if you're seeing anything, any signs of that in your forward sales to livestock producers. And then also perhaps a little color on -- your crush margins look pretty good right now. And is that just a reflection of an easy comp to a year ago or is it more rational behavior in the industry?

So the first question is we are surprised how strong the demand to the livestock area business is. We expect that somewhat a stronger drop. And we are planning for next year a drop in demand in U.S., not worldwide. Worldwide, it will be expanding. So we could see a reduction in demand as we end the first quarter. But at the moment, we don't see too much of it. In terms of crush margins, I would say it's a mixture of both. Crush margins are good, and it's rational behavior, but it's also solid demand. So the structure of the business is good.

[Operator Instructions] And at this time, we have a question from David Driscoll from Citi.

Alberto, the question is going to go back to the logistical operations down in Brazil. I mean, one of the strengths that I've always thought was true for Bunge was the significant port investments that you guys have made over the year. And then specifically, I thought that, that advantage would translate into really significant advantages in logistics out of Brazil when the infrastructure gets tight. So I know you mentioned about a strike and I know that, that would be above and beyond these comments. But can you develop this line of logic a little bit, and maybe for everybody listening, explain kind of how this plays through into next year as we would be anticipating an incredible surge of product that needs to get out of Brazil?

Look, we think that we probably have one of the best logistics in the industry with a very wide and large network of silos, which is very important if there's congestion and high freight rates that we can hold back and wait for better rates, and which has a positive impact on margins. I think we have also developed very good contracts and relationships and traditionally, being a very good customers of the railways. So we probably use more rail than others. And combined with our ports that we operate in different parts of Brazil and continue to expand, we think we are very well-positioned. So if there's one port where there's an issue, Paranaguá, we could ship it through San Francisco, Victoria, Santos and more and more through the North as we continue expanding through the river system in the North. So we look at it, as you said, if there is no other disruption like strike, we feel that we are very well-positioned.

So maybe just to go back over that one more time, just to be super clear, so next year, I anticipate that your logistical advantages will really come through in the results. Am I overstating the case?

I hope you are right.

All right. Well that's then not perfectly clear. So Drew, one final thing, you made some comments about 2013 numbers. Is there any suggestion that you can give right now for us in context of today's results and it's the best quarterly result we've seen in, I think, 7 or 8 quarters. Again, I know you don't give any mathematical guidance, but is there any context here you can really lay out for us?

Yes. I still feel very good about 2013, as I've said at a conference earlier this year. And I've said at our Investor Day, I think the people inside Bunge are much more optimistic about '13 than the people who are on the outside I think we see continued strength in Agribusiness and Foods. With -- '13's the year we probably going to put everything in place for sugar should perform at the level at its potential and what we expected. So yes, I still feel real good about '13. I think it's setting up to be a very good year for Bunge, and we're excited about it.

At this time, this concludes the time that we have for the question-and-answer session. I will now turn the call back over to Mr. Haden for closing remarks.

Thank you, Kim, and thank you for everyone joining us this morning.