CHS Inc. on April 6 reported second-quarter net income of $219.0 million and revenues of $10.3 billion, compared to a net loss of $38.2 million and $8.3 billion in revenues for the first quarter of fiscal year 2021. The company cited higher margins in its Energy segment and higher commodity prices and improved earnings in its Ag segment.
CHS’s Ag segment posted pretax earnings of $55.2 million for the quarter, up $41.1 million from last year’s second quarter. Strong global demand and market conditions resulted in increased earnings across most of its Ag segment businesses, CHS said, including oilseed processing, renewable fuels, and wholesale agronomy. The business also experienced lower volumes of feed and farm supplies due to supply chain constraints.
CHS said its strategic investment in CF Nitrogen contributed a significant portion of the second-quarter earnings, with market conditions driven by strong global demand for urea and UAN. The company’s Nitrogen Production business posted pretax earnings of $154.3 million for the second quarter, up $143.1 million from the same period a year ago.
“The U.S. agricultural industry continues to experience strong demand for grain and oilseed commodities,” said Jay Debertin, CHS President and CEO. “This strong demand, combined with global market volatility, contributed to higher earnings in the quarter.”
CHS’s Energy segment recorded pretax second-quarter earnings of $10.8 million, up $65.5 million from last year’s second quarter. The results were driven by higher refining margins and more favorable pricing of heavy Canadian crude oil processed by the company’s two refineries, which were partially offset by higher costs of renewable energy credits. CHS said lower propane margins were also reflected in the quarter due to warmer winter weather conditions.
“The Russian invasion of Ukraine in February has caused significant uncertainty and instability in global commodities markets, including agricultural commodities and crude oil,” Debertin added. “Despite these factors and inflationary pressures, CHS remains well positioned to continue to maximize value for our local cooperative and farmer-owners through our integrated global supply chain network.”
Net income for the first six months was reported at $671.0 million on revenues of $21.2 billion, versus $31.4 million and $17.0 billion, respectively, in the first half of fiscal year 2021.