CHS Inc. reported record net income of $803 million for the fiscal year ending Aug. 31, 2008, the fifth consecutive year of record income and revenues. Fiscal ’08 topped the prior year’s $756.7 million. Fiscal ’08 revenues were $32.2 billion, up 87 percent from the year-ago $17.2 billion.
The CHS ag business put in a stellar performance in FY ’08, with earnings of $568.3 million versus the year-ago $118.3 million. Ag business revenues soared to $19.7 billion, up from the year-ago $8.6 billion. The ag business includes crop nutrients, grain marketing, and retail operations, and CHS said all of them had strong global and domestic demand, along with record value for the products they market. For the year, CHS reported wholesale crop nutrient sales of $2.9 billion, with less than 10 percent of those made to co-owned Agriliance LLC or to CHS country operations business. CHS pre-tax crop nutrient income for 2008 was $137.5 million.
Crop nutrient inventories were put at $400 million as of Aug. 31, 2008. None were listed for the year-ago period, as the crop nutrient business was still with Agriliance LLC at that time.
Ag helped take up the slack from the CHS energy business, which saw a drop in earnings to $299.7 million from the year-ago $613.3 million. CHS attributed this to tighter margins.
CHS fourth-quarter net income was off, at $145.4 million on sales of $9.4 billion from the year-ago $297.1 million and $5 billion, respectively. However, ag earnings were up, at $63.8 million from $10.3 million. CHS noted that as the year ended, it recorded a $71.7 million ($55.3 million net of taxes) impairment on the value of its investment in VeraSun Energy Corp., an ethanol producer that recently filed for Chapter 11 bankruptcy. CHS owns 8 percent of VeraSun. VeraSun announced Nov. 24 that it has received a non-binding indication of interest for purchase for substantially all of its assets. For now, VeraSun will pursue this inquiry and is keeping the company’s identity and the terms confidential.
In 2008, based on 2007 results, CHS paid out $340 million in cash patronage, equity redemptions, preferred stock and dividends. Based on 2008 earnings, it expects to return about $340 million to owners during fiscal 2009.