CHS Inc. on April 5 reported second-quarter net income of $292.3 million on revenues of $11.3 billion, up from $219.0 million and $10.3 billion, respectively, in last year’s second quarter. The improvement was driven by strong refining margins and market conditions in the company’s Energy segment.
Decreased prices for agronomy products and ethanol contributed to lower earnings in the Ag segment, however, which posted a pretax loss of $81.6 million, compared with earnings of $55.2 million in last year’s second quarter. CHS reported lower margins due to market-driven price decreases across most Ag segment categories, including wholesale and retail agronomy products and renewable fuels.
The Ag segment was also impacted by a reduction in oilseed processing margins due to the timing of the impact of mark-to-market adjustments. In addition, CHS reported that its CF Nitrogen investment delivered pretax earnings of $81.7 million, down $72.5 million from last year due to lower equity income attributed to a decrease in urea and UAN selling prices.
“Strong global demand for commodities and improved market conditions for refined fuels led to increased earnings for the quarter, as well as the first half of the fiscal year,” said Jay Debertin, CHS President and CEO. “The strength of our diversified portfolio offset margin pressures experienced within our Ag segment, particularly wholesale and retail agronomy products.”
CHS’s Energy segment posted pretax earnings of $264.8 million for the second quarter, up $254.0 million from last year on higher refining and propane margins, partially offset by higher prices for renewable energy credits.
For the first six months of fiscal year 2023, the company reported net income of $1.1 billion and revenues of $24.1 billion, compared with $671.0 million and $21.2 billion, respectively, in the first half of fiscal year 2022.
“Looking ahead, we will continue to invest on behalf of our owners in infrastructure, supply chain capabilities, and innovative technology throughout our expansive global network to maximize value for our member cooperatives, farmer-owners, and customers,” Debertin said.