$297.3 Million in Third
Quarter Net Income Contributed to Strong Nine-Month
Earnings
ST.
PAUL, Minn., July 10,
2024 /PRNewswire/ -- CHS Inc., the nation's leading
agribusiness cooperative, today released results for its third
quarter ended May 31, 2024. The
company reported quarterly net income of $297.3 million and revenues of $9.6 billion compared to net income of
$547.5 million and revenues of
$12.0 billion in the third quarter of
fiscal year 2023. For the first nine months of fiscal year 2024,
the company reported net income of $990.5
million and revenues of $30.1
billion compared to record net income of $1.6 billion and record revenues of $36.1 billion in the first nine months of fiscal
year 2023.
Third quarter fiscal year 2024 highlights:
- Financial performance was solid across our segments, although
earnings were down from historically strong results in fiscal year
2023.
- Revenues decreased due to weaker commodity prices.
- Weaker grain and oilseed demand led to an earnings decline in
our Ag segment compared to the prior year.
- More challenging market conditions, including less favorable
refining margins, led to lower earnings in our Energy segment
versus the previous year.
- Our equity method investments, led by our CF Nitrogen
investment, performed well in evolving market conditions.
"Through the first nine months of our fiscal year, we have
delivered strong financial results, including the third highest net
income in our history," said Jay
Debertin, president and CEO of CHS Inc. "Although we
continue to feel the adverse impacts of softening margins for ag
and energy commodities, CHS is well positioned to navigate this
commodity cycle downturn through a strong focus on cost control and
efficiency. We are performing well and our supply chain investments
enable us to connect farmers and member cooperatives with the
inputs and services they need to help feed a growing global
population."
Energy
Pretax earnings of $97.9
million for the third quarter of fiscal year 2024 represent
a $101.1 million decrease versus the
prior year period and reflect:
- Decreased refining margins due to higher industry capacity
utilization rates bringing additional refined fuel supply to the
market, partially offset by lower costs for renewable fuel
credits
- Higher costs for heavy Canadian crude oil
Ag
Pretax earnings of $108.5
million represent a $125.0
million decrease versus the prior year period and
reflect:
- Lower crush margins in oilseed processing due to weaker meal
and oil demand
- Decreased margins for wholesale and retail agronomy products,
partly offset by higher volumes sold
- Compressed margins for our grain and oilseed product category
caused by softer demand for U.S. commodities as trade flows shift
as a result of a competitive global grain market
Nitrogen Production
Pretax earnings of $52.4 million represent a $3.9 million decrease versus the prior year
period, attributed to decreased market prices for urea and UAN.
Corporate and Other
Pretax earnings of $51.1 million represent an $18.2 million decrease versus the prior year
period, primarily reflecting lower equity income from Ventura
Foods, which experienced less favorable market conditions for
oil-based food products.
CHS Inc. Earnings*
|
by Segment
|
(in thousands $)
|
|
|
|
|
|
|
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Energy
|
$
97,850
|
|
$
198,995
|
|
$
416,264
|
|
$
860,411
|
Ag
|
108,535
|
|
233,515
|
|
335,106
|
|
439,248
|
Nitrogen Production
|
52,366
|
|
56,263
|
|
125,834
|
|
234,869
|
Corporate and Other
|
51,117
|
|
69,347
|
|
135,168
|
|
154,084
|
Income before income taxes
|
309,868
|
|
558,120
|
|
1,012,372
|
|
1,688,612
|
Income tax expense
|
12,613
|
|
10,777
|
|
21,416
|
|
66,305
|
Net income
|
297,255
|
|
547,343
|
|
990,956
|
|
1,622,307
|
Net (loss) income attributable to noncontrolling
interests
|
(19)
|
|
(156)
|
|
452
|
|
(111)
|
Net income attributable to CHS
Inc.
|
$
297,274
|
|
$
547,499
|
|
$
990,504
|
|
$ 1,622,418
|
|
|
|
|
|
|
|
|
*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.