CHS: income and sales drop in Q2/2009

St. Paul / MN. (chs) CHS Inc., a leading energy and grain-based foods company in the United States, reported earnings of 219,5 million USD for the first half of its 2009 fiscal year.

Net income for the first half of fiscal 2009 (09/2008 to 02/2009) compares with 468,9 million USD for first six months of fiscal 2008. Total revenues for the first two quarters of fiscal 2009 were 12,9 billion USD and compared with 13,4 billion USD for the same period of 2008. Revenues for fiscal 2009 reflected lower values for many of the grain, refined fuels and crop nutrients products CHS markets.

Net income for the second quarter of fiscal 2009 (12/2008 to 02/2009) was 82,3 million USD, compared with 168 million USD for the second quarter of fiscal 2008. Revenues for the quarter were 5,2 billion USD, down from 6,9 billion USD the previous year.

Year-to-date results for fiscal 2009 and for fiscal 2008, also reflected two significant events. During the first quarter of fiscal 2009, CHS recorded within its Processing segment a 70,7 million USD (64,4 million USD net of taxes) impairment on the value of its ownership of VeraSun Energy Corporation, an ethanol manufacturer that filed for bankruptcy protection and has since liquidated. During fiscal 2008, CHS recorded a gain of 91,7 million USD on the company´s sale of stock in CF Industries, a crop nutrients manufacturer.

For the first six months of fiscal 2009, improved refining margins and increased propane demand, driven by cold winter weather, contributed to increased Energy earnings. The company´s Agro Business segment – consisting of its crop nutrients, grain marketing and country retail operations – reported lower earnings due to reduced global grain demand and lower crop nutrient values. Earnings within the company´s Processing segment declined from fiscal 2008, due in part to lower consumer demand for food and ingredients which impacted CHS joint venture food manufacturing and flour milling operations. The weak economy also contributed to lower earnings for the company´s insurance, risk management and financial services businesses.