CHS Inc. reported a net loss of $31.0 million for the second quarter ending Feb. 29, 2016, compared with the year-ago earnings of $92.8 million. Results for the quarter were attributed to the current down cycle in the company’s agricultural and energy businesses. Revenues for the second quarter of fiscal 2016 were $6.7 billion, down 20 percent compared with $8.4 billion for the second quarter of fiscal 2015.
CHS Inc. has reported net income of $235.5 million for the first six months ending Feb. 29, 2016, down from the year-ago $471.5 million. Revenues through Feb. 29, 2016, were $14.4 billion, down nearly 20 percent from $17.9 billion for first half of fiscal 2015, and primarily reflected lower selling prices for the energy, grain and fertilizer products the company handles.
“Like others in our energy and agricultural space, CHS is experiencing the earnings impact of depressed global prices and reduced demand for refined fuels, grain and fertilizer,” said CHS President and CEO Carl Casale. “We’ve experienced these types of cycles throughout our more than 85-year history and will navigate this period by finding ways to run our businesses more efficiently and effectively while continuing to serve our owners’ and customers’ needs.”
Year-over-year earnings also declined within the CHS Ag segment, which includes the company’s crop nutrients, renewable fuels, Country Operations retail, animal nutrition and sunflower processing; grain marketing, and processing and food ingredients businesses. Lower earnings in this segment were largely attributed to soft market conditions across the agricultural sectors CHS serves. Lower margins affected earnings within the crop nutrients, Country Operations retail and grain marketing businesses. In the renewable fuels business, earnings declined primarily due to lower market prices. CHS processing and food ingredients earnings decreased primarily due to a non-cash impairment charge on assets held for sale.
With one month of operation in fiscal 2016, CHS generated income before taxes in its newly established Nitrogen Production segment of $1.3 million, resulting from its February 2016 equity method investment of $2.8 billion in CF Industries Nitrogen LLC.