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CHS Reports $180.1 Million First Quarter Earnings
National & World Ag News Headlines
USAgNet - 01/12/2018
CHS Inc., the nation's leading farmer-owned cooperative and a global energy, grains and foods company, today reported net income of $180.1 million for the first quarter of its 2018 fiscal year (three-month period ended Nov. 30, 2017), compared to net
income of $209.2 million for the same period a year ago.
Consolidated revenues for the first quarter of fiscal 2018 were $8.0 billion, the same as fiscal 2017. Pretax income was $199.6 million and $225.6 million for the first quarter of fiscal 2018 and 2017, respectively.
"Despite challenging market conditions, CHS experienced a solid first quarter thanks to our continued focus on three key priorities: strengthening relationships, sharpening operational excellence and restoring financial flexibility," said CHS President and Chief
Executive Officer Jay Debertin. "In the first quarter, we recorded solid earnings from our businesses and reduced long-term debt. These actions are helping to strengthen and grow CHS."
For the first quarter of fiscal 2018, reporting segment results were:
- Energy generated pretax income of $113.1 million during the first quarter, compared to $70.0 million during the same period last year.
- The $43.1 million increase was primarily driven by improved margins within refined fuels.
- The Ag segment, which includes domestic and global grain marketing and crop nutrients businesses, renewable fuels, local retail operations, and processing and food ingredients, generated pretax income of $74.5 million for the three months ended Nov. 30,
2017, compared to $109.2 million for the same period the previous fiscal year.
- The $34.7 million decrease was primarily the result of lower margins in grain marketing, processing and food ingredients and renewable fuels. Lower volumes in grain marketing and processing and food ingredients also contributed to the decrease.
- The decrease was partially offset by an increase in earnings in the crop nutrients and country operations businesses.
- This segment is comprised of the company's investment in CF Industries Nitrogen, LLC (CF Nitrogen), and generated pretax income of $5.7 million during the first quarter of fiscal 2018, compared to $27.0 million during the same time in fiscal 2017.
- The decrease in earnings was primarily due to a gain of $29.1 million from an embedded derivative associated with CF Nitrogen that was recognized in fiscal 2017. There was no comparable gain in the current fiscal year.
- This decrease was partially offset by higher urea and urea ammonium nitrate prices.
- This segment is comprised of the company's investment in Ventura Foods, LLC (Ventura Foods), and generated pretax income of $1.0 million in the first quarter of fiscal 2018, compared to $10.6 million during the same period of fiscal 2017.
- The decrease in earnings was due to lower margins at Ventura Foods.
Corporate and Other
- This category is primarily comprised of the company's wheat milling joint venture and its financing, hedging and insurance operations, and generated pretax income of $5.3 million in the first quarter of 2018, compared to $8.7 for the same period of fiscal 2017.
- The decrease in earnings was due to lower earnings from the wheat milling joint venture and less interest revenue due to amending a receivables securitization agreement in late FY17, pursuant to which we no longer receive interest income from those
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