CHS Inc. on Jan. 5 reported record quarterly net income of $452.0 million for the first quarter ending Nov. 30, 2021, compared to the year-ago $69.7 million. CHS said the significant improvement was largely driven by strong global demand across key businesses.
Revenues were $10.9 billion, up from the year-ago $8.7 billion.
“Our exceptionally strong financial performance in the first quarter of fiscal year 2022 reflects the support of local cooperatives and producers, as well as the hard work and dedication of our employees around the world, who remain focused on delivering superior value for our owners,” said Jay Debertin, CHS President and CEO.
“That support and hard work, along with the investments we continue to make in critical assets and technology advancements, are leading to operational improvements and stronger customer engagement, which are driving earnings momentum,” he added.
Ag segment pretax income was $286.4 million, up from $83 million, while revenues moved up to $8.6 billion from $7.45 billion. CHS saw higher margins across all Ag segment businesses due to strong global market conditions and robust demand for agronomy products, grains and oilseeds, soy oil, and soy meal.
CHS said Ag pretax income included a $78 million increase for wholesale agronomy products, which resulted from strong global market demand and global supply disruptions during the quarter. However, first-quarter wholesale crop nutrient volumes were off 2.7 percent, to 1.823 million st from the year-ago 1.875 million st.
CHS reported lower Ag grain volumes attributable to a smaller overall wheat crop due to drought conditions in some parts of the U.S. and the impact from Hurricane Ida on the Gulf Coast, including the impact on its grain export terminal in Myrtle Grove, La. CHS also noted that prior-year elevated trade volumes to China following the Phase One trade agreement have since plateaued.
Nitrogen Production pretax income was $96.6 million, up from $4.5 million. CHS attributed the increase to strong demand and increased prices of urea and UAN, which were partially offset by higher gas costs.
Energy pretax income was $69.2 million on revenues of $2.47 billion, up from the year-ago loss of $67.2 million on revenues of $1.36 billion. CHS said the industry continued to experience improved margins and maintain higher volumes compared to the lows experienced during the early stages of the COVID-19 pandemic; however, the volumes and margins remain lower than historical levels.