CHS Inc. reported a 32 percent increase in net income for the fiscal year ending Aug. 31, 2010, to $502.2 million from the $381.4 million in fiscal year 2009. Fiscal 2010 saw the fourth-highest earnings in the cooperative’s near 80-year history.
Wholesale crop nutrients and CHS country operations (retail), both a part of the cooperative’s Ag Business segment, saw improved results. Indeed, country operations posted record earnings. These earnings increased $37.5 million, primarily as a result of improved crop nutrient and grain margins.
Earnings from wholesale crop nutrients were $124.1 million higher in fiscal 2010 compared to the prior year. Revenues totaled $1.6 billion, down from the year-ago $2 billion. This was attributed to lower average sales prices of fertilizer, which were down 26 percent, or $117/st. However, volumes increased 4 percent.
Overall, for the year, the Ag Business segment had earnings of $269.3 million, up from the prior year’s $73.7 million. Along with the Processing segment, which saw earnings move up to $74.7 million from the year-ago $4.1 million, Ag Business helped offset the Energy business, which saw a big drop to $234.4 million from the prior year’s $418.7 million.
“Fiscal 2010 once again demonstrated the value of the diverse CHS business portfolio, which allowed us to achieve strong financial performance amid a continued weak global economy,” said John Johnson, CHS president and CEO. ‘While some of our businesses faced market challenges in 2010, many others achieved record or near-record performance in 2010.”
During fiscal 2010, CHS recorded a gain of $28.4 million related to its share of the sales of many of the southern retail facilities of Agriliance LLC.
CHS-wide, fiscal 2010 revenues were $25.3 billion, down 2 percent from fiscal 2009’s $25.7 billion, reflecting overall lower volatility in values for grains and crop nutrient commodities that make up the majority of CHS sales.
For the fourth quarter, CHS reported net income of $154 million on revenues of $6.6 billion, versus the year-ago $97.3 million and $6.7 billion. Ag Business income was actually off in the fourth quarter, to $12.9 million from the year-ago $16.4 million. For the fourth quarter, Processing was off at $27.1 million from the year-ago $33.3 million, while Energy saw a turnaround at $129.7 million, up from $67.2 million.
Based on 2010 earnings, CHS expects to return about $231 million to its owners during fiscal 2011 as cash patronage. This is down somewhat from the $237 million returned in 2010, which was based on 2009 results.