CHS Inc. reported a 106 percent increase in net income attributable to CHS for the first quarter ending Nov. 30, 2011. Net income was $416.2 million on revenues of $9.7 billion, versus the year-ago $201.7 million and revenues of $8.1 billion.
While all major CHS segments were profitable, the positive results were led by the cooperative’s Energy segment, which reported income of $397.3 million, up from the year-ago $57.2 million.
The Ag Business segment – which includes grain and fertilizer – while profitable, saw a decrease in income, to $121.4 million on total revenues of $6.45 billion, compared to the year-ago $154.7 million on revenues of $5.81 billion. The Corporate/Other segment also saw a decline, with income of $12.2 million from the year-ago $19.3 million.
Within the Ag Business segment, the CHS wholesale crop nutrients business reported a quarter-over-quarter increase in earnings due to increased margins. Earnings from the unit’s wholesale fertilizer business were up $3 million from the year-ago quarter, with revenues up 18 percent, or nearly $100 million, but volumes down 10 percent. First-quarter wholesale fertilizer revenues were $658.8 million, up from the year-ago $558.9 million. Increased revenues were attributed to average higher fertilizer prices, which were up $123/st, or 31 percent over the year-ago quarter. Despite the increase, CHS did not see much movement in prices throughout the quarter, saying as of Nov. 30, 2011, prices affecting its wholesale and country operations retail business generally remained flat or decreased up to 5 percent, depending on specific products, compared to prices on Aug. 31, 2011.
Wholesale crop nutrient cost of goods sold was $627.8 million for the quarter, up from the year-ago $531.5 million. This would suggest wholesale income of $31 million for the recent quarter, up from the year-ago $27.4 million. CHS does not specify the exact amount of these earnings, only the amount of the increase – $3 million.
Lower fertilizer volumes were reflected by CHS purchase and sales contracts. As of Nov. 30, 2011, the company had 829,000 st in purchase contracts and 1.12 million st in sales contracts, compared to the year-ago 1.9 million st and 1.79 million st, respectively. As of Nov. 30, 2011, crop nutrient inventories were valued at $395.5 million versus the year-ago $164.3 million, which would in part reflect higher prices.
CHS said country operations earnings decreased $9.9 million versus the year-ago quarter.