Solid Ag Earnings Contributed to $170.3 Million in Second Quarter Net
Income
ST. PAUL, Minn., April 3, 2024 /PRNewswire/ -- CHS Inc., the
nation's leading agribusiness cooperative, today released results
for its second quarter ended Feb. 29,
2024. The company reported quarterly net income of
$170.3 million and revenues of
$9.1 billion compared to net income
of $292.3 million and revenues of
$11.3 billion in the second quarter
of fiscal year 2023. For the first six months of fiscal year 2024,
the company reported net income of $693.2
million and revenues of $20.5
billion compared to record net income of $1.1 billion and record revenues of $24.1 billion in the first half of fiscal year
2023.
Second quarter fiscal year 2024 highlights:
- Performance was solid across our segments, although earnings
were down from the record second quarter of fiscal year 2023.
- In our Ag segment, earnings rose as agronomy markets were
stronger compared to the prior year and grain and oilseed margins
were stable.
- In our Energy segment, margins declined from the highs in the
prior year due to changing market conditions including the impact
of a historically warm winter.
- Equity method investments continued to perform well, led by our
CF Nitrogen investment.
"The first six months of our fiscal year have delivered overall
good financial results," said Jay
Debertin, president and CEO of CHS Inc. "Our supply chain
investments and well-diversified portfolio, empowered by our people
and technology, are helping us perform well as we connect farmers
and local cooperatives with the inputs and services they need to
help feed the world."
Energy
Pretax earnings of $51.6
million for the second quarter of fiscal year 2024 represent
a $213.2 million decrease versus the
prior year period and reflect:
- Decreased refining margins due to lower market prices and less
favorable pricing on heavy Canadian crude oil, partially offset by
a lower cost for renewable fuel credits
- Lower margins for propane due to global market conditions
- Reduced demand for propane and refined fuels, primarily driven
by warm weather conditions across much of our trade territory
Ag
Pretax earnings of $56.9
million represent a $138.4
million increase versus the prior year period and
reflect:
- Improved margins for our wholesale and retail agronomy products
due to improved market conditions
- Increased margins for our grain and oilseed product category
due to the timing impact of market adjustments
- Higher grain and oilseed volumes due to improved efficiencies
and a more balanced global supply and demand environment
Nitrogen Production
Pretax earnings of $37.0 million represent a $44.7 million decrease versus the prior year
period and reflect lower equity income from CF Nitrogen attributed
to decreased market prices of urea and UAN.
Corporate and Other
Pretax earnings of $40.2 million represent a $7.8 million decrease versus the prior year
period, primarily reflecting lower equity income from Ventura
Foods, which experienced less favorable market conditions for
edible oils.
CHS Inc.
Earnings*
|
by
Segment
|
(in thousands
$)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
February 29,
2024
|
|
February 28,
2023
|
|
February 29,
2024
|
|
February 28,
2023
|
Energy
|
$
51,579
|
|
$
264,822
|
|
$
318,414
|
|
$
661,416
|
Ag
|
56,851
|
|
(81,566)
|
|
226,571
|
|
205,733
|
Nitrogen
Production
|
37,009
|
|
81,733
|
|
73,468
|
|
178,606
|
Corporate and
Other
|
40,219
|
|
48,033
|
|
84,051
|
|
84,737
|
Income before
income taxes
|
185,658
|
|
313,022
|
|
702,504
|
|
1,130,492
|
Income tax
expense
|
15,325
|
|
20,974
|
|
8,803
|
|
55,528
|
Net
income
|
170,333
|
|
292,048
|
|
693,701
|
|
1,074,964
|
Net income (loss)
attributable to noncontrolling interests
|
26
|
|
(273)
|
|
471
|
|
45
|
Net income
attributable to CHS Inc.
|
$
170,307
|
|
$
292,321
|
|
$
693,230
|
|
$ 1,074,919
|
|
|
|
|
|
|
|
|
*Earnings is defined as
income (loss) before income taxes.
|
|
|
|
|
|
|
|
CHS Inc. (www.chsinc.com) creates connections to empower
agriculture. As a leading global agribusiness and the largest
farmer-owned cooperative in the United
States, CHS serves customers in 65 countries and employs
nearly 10,000 people worldwide. We provide critical crop inputs,
market access and risk management services that help farmers feed
the world. Our diversified agronomy, grains, foods and energy
businesses recorded revenues of $45.6
billion in fiscal year 2023. We advance sustainability
through our commitment to being stewards of the environment,
building economic viability and strengthening community and
employee well-being.
This document and other CHS Inc. publicly available documents
contain, and CHS officers, directors and representatives may from
time to time make, "forward-looking statements" within the meaning
of the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by words such as "anticipate," "intend," "plan," "goal,"
"seek," "believe," "project," "estimate," "expect," "strategy,"
"future," "likely," "may," "should," "will" and similar references
to future periods. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on CHS current beliefs, expectations and
assumptions regarding the future of its businesses, financial
condition and results of operations, future plans and strategies,
projections, anticipated events and trends, the economy and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of CHS control. CHS actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not place undue
reliance on any of these forward-looking statements. Important
factors that could cause CHS actual results and financial condition
to differ materially from those indicated in the forward-looking
statements are discussed or identified in CHS filings made with the
U.S. Securities and Exchange Commission, including in the "Risk
Factors" discussion in Item 1A of CHS Annual Report on Form 10-K
for the fiscal year ended August 31,
2023. These factors may include changes in commodity prices;
the impact of government policies, mandates, regulations and trade
agreements; global and regional political, economic, legal and
other risks of doing business globally; the ongoing war between
Russia and Ukraine; the escalation of conflict in the
Middle East; the impact of
inflation; the impact of epidemics, pandemics, outbreaks of disease
and other adverse public health developments, including COVID-19;
the impact of market acceptance of alternatives to refined
petroleum products; consolidation among our suppliers and
customers; nonperformance by contractual counterparties; changes in
federal income tax laws or our tax status; the impact of compliance
or noncompliance with applicable laws and regulations; the impact
of any governmental investigations; the impact of environmental
liabilities and litigation; actual or perceived quality, safety or
health risks associated with our products; the impact of
seasonality; the effectiveness of our risk management strategies;
business interruptions, casualty losses and supply chain issues;
the impact of workforce factors; our funding needs and financing
sources; financial institutions' and other capital sources'
policies concerning energy-related businesses; technological
improvements that decrease the demand for our agronomy and energy
products; our ability to complete, integrate and benefit from
acquisitions, strategic alliances, joint ventures, divestitures and
other nonordinary course-of-business events; security breaches or
other disruptions to our information technology systems or assets;
the impact of our environmental, social and governance practices,
including failures or delays in achieving our strategies or
expectations related to climate change or other environmental
matters; the impairment of long-lived assets; the impact of bank
failures; and other factors affecting our businesses generally. Any
forward-looking statements made by CHS in this document are based
only on information currently available to CHS and speak only as of
the date on which the statement is made. CHS undertakes no
obligation to update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise except as
required by applicable law.
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SOURCE CHS Inc.