CHS Inc. marked its 75th anniversary at its shareholders meeting Nov. 30 in Portland, Ore., with the company noting that it posted both record earnings and sales for the year ending Aug. 31, 2006. Net earnings were $490.3 million on sales of $14.4 billion, up from 2005’s $250 million and $11.9 billion, respectively. It was the company’s third consecutive year of record earnings. Record revenues were attributed to increased market prices for refined fuels and increased values and volume of grain.
Fourth-quarter earnings were $159.3 million on sales of $4 billion, up from the year-ago $116.4 million and $3.4 billion, respectively.
During fiscal 2006, CHS was able to return a record $153 million (based on 2005 performance) in cash patronage, equity redemptions, preferred stock, and dividends to its owners. It expects to distribute $248 million in cash and equity redemption to owners in 2007.
CHS reported that net income from Agriliance LLC, in which it owns a 50 percent stake, was off by $25 million for the year ending Aug. 31, to $52.3 million on sales of $3.74 billion versus the year-ago $77.1 million and $3.73 billion, respectively. CHS did not report fourth-quarter results for Agriliance. Agriliance reports its results in the same fiscal year as CHS. Its other owner, Land O’Lakes Inc., goes by a calendar year ending in December. LOL recently reported Agriliance as having an $8.1 million loss for the quarter ending Sept. 30, 2006, and earnings of $56.6 million, down $30 million, for the nine months ending Sept. 30 (GM Nov. 20, p. 1).
CHS also noted that it reduced its stake in CF Industries Inc. during the recent fiscal year, selling 540,000 shares to go from a 3.9 percent stake to 2.9 percent. As a result, it said it now considers CF as a supplier rather than a strategic joint venture. Agriliance has a multi-year supply contract with CF and purchased approximately 28 percent of its fertilizer from CF in fiscal 2006, with other fertilizer suppliers including Mosaic Co., Potash Corp. of Saskatchewan Inc., PIC, and Koch Nitrogen. Most of Agriliance’s crop protection products are purchased from Monsanto, Syngenta, Dow, Bayer, DuPont, and BASF.
Of Agriliance’s $3.7 billion in 2006 revenues, $1.8 billion was crop nutrient products, and $1.9 billion crop protection and other products.