CHS Inc., the nation's leading agribusiness cooperative, announced its financial results for the third quarter ended May 31, 2024, reporting net income of $297.3 million on revenues of $9.6 billion. This marks a decline from the same quarter in fiscal year 2023, which saw net income of $547.5 million and revenues of $12.0 billion. For the first nine months of fiscal year 2024, CHS reported net income of $990.5 million and revenues of $30.1 billion, down from the previous year's record of $1.6 billion in net income and $36.1 billion in revenues.
Third quarter highlights
- Financial performance: While all segments showed solid performance, earnings were lower compared to the historically strong results of fiscal year 2023.
- Revenue decline: A decrease in revenues was attributed to weaker commodity prices.
- Ag segment: Earnings declined due to weaker grain and oilseed demand.
- Energy segment: Lower earnings were due to challenging market conditions, including less favorable refining margins.
- Equity investments: Investments, particularly in CF Nitrogen, performed well despite evolving market conditions.
"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 Jay Debertin, president and CEO of CHS Inc. "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. We are performing well and our supply chain investments enable us to connect farmers and member cooperatives with the inputs and services they need to help feed a growing global population."
Segment performance
Energy:
- Pretax earnings: $97.9 million, a $101.1 million decrease from the prior year.
- Factors: Decreased refining margins due to higher industry capacity utilization rates, lower costs for renewable fuel credits, and higher costs for heavy Canadian crude oil.
Ag:
- Pretax earnings: $108.5 million, a $125.0 million decrease from the prior year.
- Factors: Lower crush margins in oilseed processing due to weaker meal and oil demand, decreased margins for wholesale and retail agronomy products partly offset by higher volumes sold, and compressed margins for grain and oilseed products due to softer demand for U.S. commodities amid competitive global grain markets.
Nitrogen Production:
- Pretax earnings: $52.4 million, a $3.9 million decrease from the prior year.
- Factors: Decreased market prices for urea and UAN.
Corporate and Other:
- Pretax earnings: $51.1 million, an $18.2 million decrease from the prior year.
- Factors: Lower equity income from Ventura Foods, which faced less favorable market conditions for oil-based food products.
CHS remains committed to navigating the current commodity cycle downturn through cost control and efficiency, ensuring robust performance and continued support for farmers and member cooperatives.
