Strong Global Demand
Generated $547.5
Million in Net Income for Third Quarter of
Fiscal Year 2023
ST.
PAUL, Minn., July 13,
2023 /PRNewswire/ -- CHS Inc. (NASDAQ: CHSCP), the
nation's leading agribusiness cooperative, today released results
for its third quarter ended May 31,
2023. The company reported quarterly net income of
$547.5 million compared to a record
third quarter net income of $576.6
million in fiscal year 2022. For the first nine months of
fiscal year 2023, the company reported net income of $1.6 billion and revenues of $36.1 billion, compared to net income of
$1.2 billion and revenues of
$34.4 billion recorded during the
same period of fiscal year 2022.
Fiscal 2023 third quarter highlights include:
- Our Energy segment delivered strong earnings, reflecting
sustained favorable market conditions in our refined fuels
business.
- Improved soybean and canola crush margins due to strong meal
and oil demand resulted in higher earnings in our oilseed
processing business.
- Market-driven price decreases for wholesale and retail agronomy
products resulted in lower margins versus the same period last
year.
"Consumer demand remains strong for energy and oilseed products,
and our joint venture investments continue to contribute to strong
earnings and round out our well-diversified portfolio," said
Jay Debertin, president and CEO of
CHS Inc. "As we enter the end of our fiscal year, opportunities
remain for profitability and growth in the agriculture industry,
and CHS is well-positioned to maximize value for our member
cooperatives, farmer-owners and customers."
Energy
Pretax earnings of $199
million for the third quarter of fiscal year 2023 represent
a $35.8 million increase versus the
prior year period and reflect:
- Strong refining margins attributed to global market conditions
and favorable pricing of heavy Canadian crude oil in our refined
fuels business
- Higher margins were partially offset by decreased refined fuels
production volumes related to planned major maintenance at our
refinery in Laurel, Mont.
Ag
Pretax earnings of $233.5
million represent a $40.2
million decrease in earnings versus the prior year period
and reflect:
- Increased margins in our grain and oilseed and processing
product categories, due primarily to strong meal and oil
demand
- Market-driven price decreases, particularly for wholesale and
retail agronomy products, which led to lower margins
Nitrogen Production
Pretax earnings of $56.3 million represent a $121.9 million decrease versus the prior year
period due to lower equity income from CF Nitrogen attributed to
decreased market prices of urea and UAN.
Corporate and Other
Pretax earnings of $69.3 million represent a $45.8 million increase versus the prior year
period and reflect improved equity income from our Ventura Foods
joint venture and increased interest income due to higher interest
rates.
CHS Inc.
Earnings*
|
by
Segment
|
(in thousands
$)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Energy
|
$
198,995
|
|
$
163,241
|
|
$
860,411
|
|
$
243,262
|
Ag
|
233,515
|
|
273,688
|
|
439,248
|
|
615,294
|
Nitrogen
Production
|
56,263
|
|
178,212
|
|
234,869
|
|
429,052
|
Corporate and
Other
|
69,347
|
|
23,596
|
|
154,084
|
|
48,619
|
Income before
income taxes
|
558,120
|
|
638,737
|
|
1,688,612
|
|
1,336,227
|
Income tax
expense
|
10,777
|
|
62,492
|
|
66,305
|
|
89,143
|
Net
income
|
547,343
|
|
576,245
|
|
1,622,307
|
|
1,247,084
|
Net loss
attributable to noncontrolling interests
|
(156)
|
|
(329)
|
|
(111)
|
|
(451)
|
Net income
attributable to CHS Inc.
|
$
547,499
|
|
$
576,574
|
|
$ 1,622,418
|
|
$ 1,247,535
|
|
|
|
|
|
|
|
|
*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 $47.8
billion in fiscal year 2022. 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 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, 2022, and in item 1A of
CHS Quarterly Report on Form 10-Q for the fiscal quarter ended
February 28, 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 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; uncertainty regarding the
transition away from LIBOR and the replacement of LIBOR with an
alternative reference rate; 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.