CHS Inc. on July 13 reported third-quarter net income of $547.5 million, down from last year’s record $576.6 million. Nine-month net income for the company climbed to $1.6 billion on revenues of $36.1 billion, however, up from last year’s $1.2 billion and $34.4 billion, respectively.
Favorable market conditions boosted the company’s Energy segment in the third quarter, while lower prices weighed on margins in CHS’s Ag business.
“Consumer demand remains strong for energy and oilseed products, and our joint venture investments continue to contribute to strong earnings and round out our well-diversified portfolio,” said Jay Debertin, CHS President and CEO. “As we enter the end of our fiscal year, opportunities remain for profitability and growth in the agriculture industry, and CHS is well-positioned to maximize value for our member cooperatives, farmer-owners and customers.”
The company’s Energy segment posted pretax earnings of $199 million for the third quarter, up $35.8 million from last year, fueled by strong refining margins and favorable pricing in CHS’s refined fuels business. The higher margins were partially offset by decreased fuels production volumes due to planned maintenance at CHS’s Laurel, Mont., refinery, however.
The company’s Ag segment posted third-quarter pretax earnings of $233.5 million, down $40.2 million from last year’s third quarter, due to market-driven price decreases and lower margins, particularly for wholesale and retail agronomy products. Strong meal and oil demand contributed to increased margins in CHS’s grain and oilseed and processing product categories, however.
CHS reported that its CF Nitrogen investment delivered pretax earnings of $56.3 million during the quarter, down $121.9 million from last year due to lower equity income attributed to decreased market prices for urea and UAN.
CHS’s Corporate and Other segment reported pretax earnings of $69.3 million for the quarter, up $45.8 million from last year due to improved equity income from the company’s Ventura Foods joint venture and increased interest income due to higher interest rates.
Nine-month earnings by segment included Energy at $860 million, up from $243 million last year; Ag at $439 million, down from last year’s $615 million; Nitrogen Production at $235 million, down from $429 million last year; and Corporate/Other at $154 million, up from $48.6 million last year.