Second Quarter Net Income
of $292.3 Million in Fiscal Year
2023 Reflects Strong Energy Market
Conditions
ST.
PAUL, Minn., April 5,
2023 /PRNewswire/ -- CHS Inc., (NASDAQ: CHSCP)
the nation's leading agribusiness cooperative, today released
results for its second quarter ended Feb.
28, 2023. The company reported quarterly net income of
$292.3 million compared to
$219.0 million in the second quarter
of fiscal year 2022. For the first six months of fiscal year 2023,
the company reported net income of $1.1
billion and revenues of $24.1
billion compared to net income of $671.0 million and revenues of $21.2 billion recorded in the first half of
fiscal year 2022.
Fiscal 2023 second quarter highlights include:
- Revenues of $11.3 billion
compared to $10.3 billion in the
second quarter of fiscal year 2022, a year-over-year increase of
9%.
- Strong refining margins and market conditions in our refined
fuels business drove significantly improved earnings in our Energy
segment.
- Decreased prices for agronomy products and ethanol contributed
to lower earnings in our Ag segment.
- Our CF Nitrogen investment delivered solid earnings due to
strong global demand for urea and UAN, although selling prices for
those products have decreased.
"Strong global demand for commodities and improved market
conditions for refined fuels led to increased earnings for the
quarter, as well as the first half of the fiscal year," said
Jay Debertin, president and CEO of
CHS Inc. "The strength of our diversified portfolio offset margin
pressures experienced within our Ag segment, particularly wholesale
and retail agronomy products. Looking ahead, we will continue to
invest on behalf of our owners in infrastructure, supply chain
capabilities and innovative technology throughout our expansive
global network to maximize value for our member cooperatives,
farmer-owners and customers."
Energy
Pretax earnings of $264.8 million for the second quarter of fiscal
year 2023 represent a $254.0 million
increase versus the prior year period and reflect:
- Higher refining margins resulting from increased global demand,
favorable pricing on heavy Canadian crude oil and improved market
conditions for refined fuels
- Higher propane margins driven by global markets and price
volatility
- Higher prices for renewable energy credits that partially
offset higher margins
Ag
Pretax losses of $81.6
million represent a $136.7
million decrease in earnings versus historically strong
earnings in the prior year period and reflect:
- Lower margins due to market-driven price decreases across most
Ag segment categories, including wholesale and retail agronomy
products and renewable fuels
- A reduction in oilseed processing margins due to the timing of
the impact of mark-to-market adjustments
Nitrogen Production
Pretax earnings of $81.7 million represent a $72.5 million decrease versus the prior year
period due to lower equity income from CF Nitrogen attributed to a
decrease in urea and UAN selling prices.
Corporate and Other
Pretax earnings of $48.0 million represent a $37.5 million increase versus the prior year
period and reflect increased interest income resulting from higher
interest rates, as well as improved equity income from our Ventura
Foods joint venture, which experienced more favorable market
conditions for edible oils.
CHS Inc.
Earnings*
|
by
Segment
|
(in thousands
$)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
February 28,
|
|
Six Months
Ended February
28,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Energy
|
$
264,822
|
|
$
10,832
|
|
$
661,416
|
|
$
80,021
|
Ag
|
(81,566)
|
|
55,181
|
|
205,733
|
|
341,606
|
Nitrogen
Production
|
81,733
|
|
154,257
|
|
178,606
|
|
250,840
|
Corporate and
Other
|
48,033
|
|
10,557
|
|
84,737
|
|
25,023
|
Income before
income taxes
|
313,022
|
|
230,827
|
|
1,130,492
|
|
697,490
|
Income tax
expense
|
20,974
|
|
11,931
|
|
55,528
|
|
26,651
|
Net
income
|
292,048
|
|
218,896
|
|
1,074,964
|
|
670,839
|
Net (loss) income
attributable to noncontrolling
interests
|
(273)
|
|
(104)
|
|
45
|
|
(122)
|
Net income
attributable to CHS Inc.
|
$
292,321
|
|
$
219,000
|
|
$ 1,074,919
|
|
$
670,961
|
|
|
|
|
|
|
|
|
*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.