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CHS: reports first half fiscal 2019 financial results

St. Paul / MN. (chs) CHS Inc., the United States’ leading agricultural co-op and a global energy, grains and foods company, reported net income of USD 248.8 million for the second quarter of fiscal 2019 and USD 596.3 million for the first six months of fiscal 2019. «Our strong performance in the second quarter reflects our hard work at serving our owners and other customers better. We’ve refocused on serving our customers and improving our operations, and that has shown positive results in our financials for the first half of fiscal 2019,» said Jay Debertin, CHS president and chief executive officer. «Our performance also reflects the benefit of a diverse platform across business units that serves our cooperative and farmer-owners.»

Key financial highlights for the quarter ending February 28, 2019, include:

  • Consolidated revenues of USD 6.5 billion compared to USD 7.0 billion in the restated second quarter of fiscal year 2018.
  • Net income of USD 248.8 million compared to USD 166.0 million from the restated second quarter of fiscal year 2018.
  • Pretax income of USD 261.9 million compared to a loss of USD 21.7 million from the restated second quarter of fiscal 2018.
  • Favorable pricing for crude oil supplied to the CHS refinery business.
  • Higher earnings from the investments in CF Nitrogen and Ventura Foods.

«The first six months of our fiscal year have returned overall good financial results,» Debertin said. «But we face challenges, particularly in our Ag segment. These challenges of low commodity prices, trade difficulties and harsh winter weather impact all of agriculture, especially farmers. As we look to the rest of our fiscal year, we know there are factors such as the recent flooding we cannot control that will continue to affect agribusiness and those growing the food to feed the world.»

Second Quarter Fiscal 2019 Segment Results

The following segment results were reported for the second quarter of fiscal 2019 as compared to second quarter fiscal 2018.

  • Energy: The USD 282.1 million increase in Energy pretax earnings reflects:
    • Improved market conditions in the CHS refined fuels business, primarily driven by favorable pricing on heavy Canadian crude oil.
  • Ag: The USD 8.9 million decrease in Ag pretax earnings was driven by:
    • Significant pressure on grain volume and margin due to slower movement of grain caused by price, weather, logistics and unresolved trade issues.
  • Nitrogen Production: The USD 6.2 million increase in Nitrogen Production pretax earnings reflects:
    • Improved margins at CF Nitrogen, driven by increased sale prices of urea and UAN, which are produced and sold by CF Nitrogen.
  • Corporate and Other: The USD 4.2 million increase in Corporate and Other pretax earnings reflects:
    • Higher earnings from the company’s investment in Ventura Foods and increased revenue from other corporate activities.