CHS: reports 2022 second quarter earnings

St. Paul / MN. (chs) CHS Inc., the United States’ leading agricultural co-op and a global energy, grains and foods company, released results for its second quarter ended Feb. 28, 2022. The company reported second quarter net income of USD 219.0 million and revenues of USD 10.3 billion, compared to a net loss of USD 38.2 million and USD 8.3 billion in revenues for the second quarter of fiscal year 2021. For the first six months of fiscal year 2022, the company reported net income of USD 671.0 million and revenues of USD 21.2 billion, compared to net income of USD 31.4 million and revenues of USD 17.0 billion recorded in the first half of fiscal year 2021. Fiscal 2022 second quarter highlights include:

  • Refining margins in our Energy segment were higher due to global supply and demand factors and more favorable pricing for Canadian crude oil, which is processed by CHS refineries.
  • Robust global demand, coupled with increased market volatility, resulted in higher commodity prices and improved earnings, primarily in our Ag segment.
  • Our processing and wholesale agronomy businesses drove significantly improved earnings compared to the second quarter of fiscal year 2021.
  • Our strategic investment in CF Nitrogen contributed a significant portion of our second quarter earnings, as a result of market conditions driven by strong global demand for urea and urea ammonium nitrate.

«The U.S. agricultural industry continues to experience strong demand for grain and oilseed commodities. This strong demand combined with global market volatility contributed to higher earnings in the quarter,» said Jay Debertin, president and CEO of CHS Inc. «The Russian invasion of Ukraine in February has caused significant uncertainty and instability in global commodities markets, including agricultural commodities and crude oil,» Debertin added. «Despite these factors and inflationary pressures, CHS remains well positioned to continue to maximize value for our local cooperative and farmer-owners through our integrated global supply chain network.»

Energy
Pretax earnings of USD 10.8 million for the second quarter of fiscal year 2022 represent a USD 65.5 million increase versus the same period a year ago.

  • The results were driven by higher refining margins and more favorable pricing of heavy Canadian crude oil processed by our two refineries, which were partially offset by higher costs of renewable energy credits.
  • Lower propane margins were reflected in the quarter due to warmer winter weather conditions.

Agriculture
Pretax earnings of USD 55.2 million for the second quarter of fiscal year 2022 represent a USD 41.1 million increase versus the same period a year ago.

  • Strong global demand and market conditions resulted in increased earnings across most of our Ag segment businesses, including oilseed processing, renewable fuels and wholesale agronomy.
  • The business also experienced lower volumes of feed and farm supplies, due to supply chain constraints.

Nitrogen Production
Pretax earnings of USD 154.3 million for the second quarter of fiscal year 2022 represent a USD 143.1 million increase versus the same period a year ago.

  • Our strategic investment in CF Nitrogen experienced significantly increased earnings in the quarter largely due to market conditions and strong global demand for urea and urea ammonium nitrate.

Corporate and Other
Pretax earnings of USD 10.6 million for the second quarter of fiscal year 2022 represent a USD 12.2 million decrease versus the same period a year ago.

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