CHS Inc. on July 10 reported a drop in net income and revenues for the third quarter and first nine months of fiscal year 2024, citing weaker commodity prices, weaker grain and oilseed demand in the company’s Ag segment, and less favorable refining margins in its Energy segment.
Quarterly net income was reported at $297.3 million on revenues of $9.6 billion, compared with $547.5 million and $12.0 billion, respectively, in last year’s third quarter. Nine-month net income came in at $990.5 million on revenues of $30.1 billion, down from a record $1.6 billion and $36.1 billion, respectively, in the previous year.
“Through the first nine months of our fiscal year, we have delivered strong financial results, including the third highest net income in our history,” said CHS President and CEO Jay Debertin. “Although we continue to feel the adverse impacts of softening margins for ag and energy commodities, CHS is well positioned to navigate this commodity cycle downturn through a strong focus on cost control and efficiency.”
The company’s Ag segment posted pretax earnings of $108.5 million for the third quarter, down $125.0 million from last year’s $233.5 million. CHS cited lower crush margins in oilseed processing due to weaker meal and oil demand, as well as decreased margins for wholesale and retail agronomy products, partly offset by higher sales volumes.
Nitrogen production reported pretax earnings of $52.4 million for the quarter, down $3.9 million from last year due to lower market prices for urea and UAN. “Our equity method investments, led by our CF Nitrogen investment, performed well in evolving market conditions, CHS said.
The Energy segment posted pretax earnings of $97.9 million for the third quarter, down $101.1 million from last year. CHS cited decreased refining margins due to higher industry capacity utilization rates bringing additional refined fuel supply to the market, partially offset by lower costs for renewable fuel credits. The company also noted higher costs for heavy Canadian crude oil.
In its Corporate and Other segment, CHS reported pretax earnings of $51.1 million for the quarter, down $18.2 million from last year due primarily to lower equity income from Ventura Foods, which CHS said experienced less favorable market conditions for oil-based food products.