CHS Inc. reported a 68 percent increase in net income attributable to CHS operations for the first quarter ending Nov. 30, 2010. CHS cited higher average values for energy, grains, oilseeds, crop nutrients, and processed oilseed products. Net income was $201.7 million on sales of $8.1 billion, up from the year-ago $120 million on sales of $6.2 billion.
The company’s Ag Business segment recorded increased volumes and earnings during the first quarter of fiscal 2011, primarily driven by stronger global grain demand, which boosted CHS grain marketing, crop nutrients, and local retail business performance.
The Ag Business, which includes crop nutrients, reported income before taxes of $150.7 million on sales of $5.54 billion, compared to the year-ago income of $91.7 million on sales of $3.74 billion.
Wholesale crop nutrient revenues totaled $558.9 million, up from the year-ago $281.1 million, due to higher volumes and fertilizer prices. The average fertilizer selling price was up $84/st, or 27 percent from the year-ago period. Wholesale crop nutrient volumes increased 57 percent. CHS attributed the uptick to a better fall season in 2010 compared to a late season in 2009.
CHS said earnings from the wholesale crop nutrient business improved $12.9 million compared to the year-ago quarter, mostly due to increased volumes and improved margins. Earnings from the country operations, which include elevators and agri-service center business, increased $30.2 million, primarily as a result of higher grain volumes and increased retail margins, including acquisitions made in the past year.
Fertilizer demand was up about 1 million st year over year based on CHS purchase and sales contracts as of Nov. 30, 2010, which were 1.92 million st and 1.79 million st, respectively. Purchase and sale contracts as of Nov. 30, 2009, were 909,000 st and 804,000 st, respectively. Crop nutrient inventories were valued at $164.3 million as of Nov. 30, 2010, versus $112.4 million as of Nov. 30, 2009.
CHS saw increased energy income of $57.3 million, up from the year-ago $14.3 million, while processing income was off at $19.4 million from $30.8 million.