ST. PAUL, Minn., Jan. 12, 2017 /PRNewswire/ -- CHS Inc.
(NASDAQ: CHSCP), the nation's leading farmer-owned cooperative and
a global energy, grains and foods company, today reported net
income of $209.2 million for the
first quarter of its 2017 fiscal year.
Earnings for the period (Sept. 1 –
Nov. 30, 2016) declined 22 percent
from the same period of fiscal 2016. The decrease was primarily
attributed to lower pretax earnings in the company's Energy and
Foods segments along with Corporate and Other. These declines were
partially offset by increased pretax earnings in the CHS Ag segment
as well as earnings from the new Nitrogen Production segment.
"We've been in business for nearly nine decades, so we've
experienced these types of cycles before," said CHS President and
Chief Executive Officer Carl Casale.
"Although it's not possible to predict how long the current down
cycle in the ag and energy industries will continue, we'll navigate
through this period by continuing to run our businesses efficiently
and effectively, by maintaining a strong balance sheet and by
ensuring we serve our owners' and customers' needs in all we
do."
The CHS Energy segment generated a pretax income of $70.0 million for the first three months of the
2017 fiscal year, compared to $192.9
million for the same period in 2016, representing a decline
of 64 percent. This reduction is primarily due to the down
cycle in the energy sector and
significantly reduced refining margins for the company's two
refineries. In addition, earnings for the company's transportation
business declined while the lubricants business remained flat and
propane earnings increased from the same period a year ago.
The CHS Ag segment, which includes its domestic and global grain
and crop nutrients businesses, renewable fuels, local retail
operations and processing and food ingredients, generated income of
$109.2 million, an increase of 58
percent over the same period a year ago. Grain marketing earnings
increased as a result of increased grain margins. Earnings from
renewable fuels marketing and production operations increased as a
result of higher ethanol sales margins. The wholesale crop
nutrients business increased mainly due to increased margins.
Country operations earnings increased because of increased grain
volumes and other income, which was partially offset by loan loss
reserves. CHS processing and food ingredients businesses
experienced decreased earnings due to the sale of an international
location and lower margins in the domestic soybean crushing
business. These reductions were partially offset by higher margins
in the canola crushing and soybean refining businesses.
The Nitrogen Production segment generated income of $27.0 million before taxes during the first three
months of the fiscal year. This increase in income was primarily
driven by a gain of $29.1 million
associated with an embedded derivative asset established due to the
terms of our strategic investment in CF Industries Nitrogen, LLC
("CF Nitrogen"). There are no comparable results in the prior year
as this segment represents our investment in CF Nitrogen, which
occurred in February 2016.
First quarter results for the Foods segment, which was
previously reported as a component of Corporate and Other,
generated pretax earnings of $10.6
million during the first quarter of 2017. This represents a
decrease of $7.7 million compared to
the same period the year before. This segment consists solely of
our equity investment in Ventura Foods, LLC.
Corporate and Other generated pretax earnings of $8.8 million during the first quarter of fiscal
2017, compared to $9.4 million during
the same time period the previous year. This segment primarily
represents the company's equity investment in the Ardent Mills, LLC
wheat milling joint venture and Business Solutions
operations.
CHS Inc. (www.chsinc.com) is a leading global agribusiness owned
by farmers, ranchers and cooperatives across the United States. Diversified in energy,
grains and foods, CHS is committed to helping its customers,
farmer-owners and other stakeholders grow their businesses through
its domestic and global operations. CHS, a Fortune 100 company,
supplies energy, crop nutrients, grain marketing services, animal
feed, food and food ingredients, along with business solutions
including insurance, financial and risk management services. The
company operates petroleum refineries/pipelines and manufactures,
markets and distributes Cenex® brand refined fuels,
lubricants, propane and renewable energy products.
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 Report
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, 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 rely 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 public 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,
2016. 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 publicly 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.
CHS Inc.
Earnings
|
By
segment
|
(in millions
$)
|
|
|
For the Three
Months Ended
|
|
Nov.
30,
|
|
2017
(fiscal
year)
|
|
2016
(fiscal
year)
|
|
|
|
|
|
|
Energy
|
$70.0
|
|
$192.9
|
Ag
|
109.2
|
|
69.3
|
Nitrogen
Production
|
27.0
|
|
-
|
Foods
|
10.6
|
|
18.3
|
Corporate and
Other
|
8.8
|
|
9.4
|
Income before
income taxes
|
225.6
|
|
289.9
|
Income
taxes
|
(16.6)
|
|
(23.7)
|
Net
income
|
209.0
|
|
266.2
|
Net income
attributable to non-controlling interests
|
0.2
|
|
0.3
|
Net income
attributable to CHS Inc.
|
$209.2
|
|
$266.5
|
|
|
|
|
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visit:http://www.prnewswire.com/news-releases/chs-reports-2092-million-first-quarter-earnings-for-fiscal-2017-300390234.html
SOURCE CHS Inc.