CHS Reports Second Quarter Fiscal Year 2024 Earnings

Image courtesy of CHS Inc.

CHS Inc., an agribusiness cooperative, released results for its second quarter ended Feb. 29, 2024. The company reported quarterly net income of $170.3 million and revenues of $9.1 billion compared to net income of $292.3 million and revenues of $11.3 billion in the second quarter of fiscal year 2023.

For the first six months of fiscal year 2024, the company reported net income of $693.2 million and revenues of $20.5 billion compared to record net income of $1.1 billion and record revenues of $24.1 billion in the first half of fiscal year 2023.

Second quarter fiscal year 2024 highlights:

  • Performance was solid across our segments, although earnings were down from the record second quarter of fiscal year 2023.
  • In our Ag segment, earnings rose as agronomy markets were stronger compared to the prior year and grain and oilseed margins were stable.
  • In our Energy segment, margins declined from the highs in the prior year due to changing market conditions including the impact of a historically warm winter.
  • Equity method investments continued to perform well, led by our CF Nitrogen investment.

"The first six months of our fiscal year have delivered overall good financial results," said Jay Debertin, president and CEO of CHS Inc. "Our supply chain investments and well-diversified portfolio, empowered by our people and technology, are helping us perform well as we connect farmers and local cooperatives with the inputs and services they need to help feed the world."

Energy

Pretax earnings of $51.6 million for the second quarter of fiscal year 2024 represent a $213.2 million decrease versus the prior year period and reflect:

  • Decreased refining margins due to lower market prices and less favorable pricing on heavy Canadian crude oil, partially offset by a lower cost for renewable fuel credits
  • Lower margins for propane due to global market conditions
  • Reduced demand for propane and refined fuels, primarily driven by warm weather conditions across much of our trade territory

Ag

Pretax earnings of $56.9 million represent a $138.4 million increase versus the prior year period and reflect:

  • Improved margins for our wholesale and retail agronomy products due to improved market conditions
  • Increased margins for our grain and oilseed product category due to the timing impact of market adjustments
  • Higher grain and oilseed volumes due to improved efficiencies and a more balanced global supply and demand environment

Nitrogen Production

Pretax earnings of $37.0 million represent a $44.7 million decrease versus the prior year period and reflect lower equity income from CF Nitrogen attributed to decreased market prices of urea and UAN.

Corporate and Other

Pretax earnings of $40.2 million represent a $7.8 million decrease versus the prior year period, primarily reflecting lower equity income from Ventura Foods, which experienced less favorable market conditions for edible oils.

CHS Inc. Earnings*
by Segment
(in thousands $)
Three Months Ended Six Months Ended
February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023
Energy $ 51,579 $ 264,822 $ 318,414 $ 661,416
Ag 56,851 (81,566) 226,571 205,733
Nitrogen Production 37,009 81,733 73,468 178,606
Corporate and Other 40,219 48,033 84,051 84,737
Income before income taxes 185,658 313,022 702,504 1,130,492
Income tax expense 15,325 20,974 8,803 55,528
Net income 170,333 292,048 693,701 1,074,964
Net income (loss) attributable to noncontrolling interests 26 (273) 471 45
Net income attributable to CHS Inc. $ 170,307 $ 292,321 $ 693,230 $ 1,074,919
*Earnings is defined as income (loss) before income taxes.