St. Paul / MN. (chs) CHS Inc., the United States’ leading agricultural co-op and a global energy, grains and foods company, released financial results for its first quarter ended November 30, 2022. The company reported quarterly net income of USD 782.6 million compared to USD 452.0 million in the first quarter of fiscal year 2022. Fiscal 2023 first quarter highlights include:
- Revenues of USD 12.8 billion compared to USD 10.9 billion in the first quarter of fiscal year 2022, a year-over-year increase of 17 percent.
- Continued robust global demand for commodities, coupled with market volatility, resulted in strong earnings across all business segments.
- Significantly improved earnings in our Energy segment resulted primarily from higher refining margins driven by strong demand in rural America and global market conditions.
- Our soybean and canola processing businesses in our Ag segment benefited from strong demand for meal and oil.
- Our CF Nitrogen investment delivered strong earnings due to robust urea and UAN demand.
«The U.S. agricultural industry has benefited from ongoing strong global demand for grain and oilseed commodities,» said Jay Debertin, president and CEO of CHS Inc. «Our continued strong earnings are attributable to market dynamics and supported by our investments on behalf of our owners in infrastructure, supply chain capabilities and innovative technology that drive efficiency and operational improvements. As we enter 2023, CHS remains well-positioned to maximize value for our member cooperatives, farmer-owners and customers.»
Pretax earnings of USD 396.6 million for the first quarter of fiscal year 2023 represent a USD 327.4 million increase versus the prior year period and reflect:
- Improved refined fuels market conditions including higher refining margins and discounts on heavy Canadian crude oil, partially offset by higher renewable energy credit costs and increased refinery maintenance expenses
- Higher refined fuels and propane volumes driven by strong demand due to more favorable weather conditions during fall harvest compared to the same period in fiscal year 2022
- Lower propane margins resulting from hedging-related impacts due to volatile pricing in Q1-2023
Pretax earnings of USD 287.3 million represent a USD 0.9 million increase versus Q1-2022 and reflect:
- Strong global demand and constrained supply for grain and oilseed
- Improved margins in our oilseed processing business due to robust demand as well as mark-to-market gains
- Lower margins on our grain and oilseed commodities, driven by unfavorable mark-to-market impacts, as well as less favorable pricing for our agronomy products
- Decreased volumes across most of our Ag segment due to numerous factors, including drought conditions in portions of our trade territory
Pretax earnings of USD 96.9 million represent a USD 0.3 million increase versus the prior year period and reflect continued favorable performance of our strategic investment in CF Nitrogen due to strong global demand for urea and UAN. Pretax earnings of USD 36.7 million represent a USD 22.2 million increase versus the prior year period and reflect increased equity income from our Ventura Foods joint venture, which resulted from more favorable market conditions for edible oils.
Earnings by Segment – income (loss) before income taxes
|(in thousands USD)||Q1-2023||Q1-2022|
|Corporate and Other||USD||36,704||USD||14,465|
|Income before income taxes||USD||817,470||USD||466,663|
|Income tax expense||USD||34,554||USD||14,720|
|Net income (loss) attributable to noncontrolling interests||USD||318||USD||(18)|
|Net income attributable to CHS Inc.||USD||782,598||USD||451,961|