ST. PAUL, Minn., April 5, 2017 /PRNewswire/ -- CHS Inc.
(NASDAQ: CHSCP, CHSCO, CHSCN, CHSCM, CHSCL), the nation's leading
farmer-owned cooperative and a global energy, grains and foods
company, today reported net income of $14.6
million for the second quarter of its 2017 fiscal year (the
three-month period ended Feb. 28,
2017), compared to a net loss of $31
million for the second quarter of fiscal 2016. Operating
earnings for the company's second quarter were $10.5 million, up from a loss of $91.8 million from the second quarter of fiscal
2016. Revenues for the second quarter were $7.3 billion, up 11 percent compared with
$6.6 billion for the second quarter
of fiscal 2016.
Earnings for the six months of the company's fiscal 2017 (the
six-month period ended Feb. 28,
2017), were $223.7 million,
compared to $235.5 million for the
first six months of fiscal 2016, a decrease of 5 percent. The
decrease is a result of increased loan loss reserves, higher income
taxes and continued challenges in the energy operating environment,
which were partially offset by improved conditions across CHS
wholesale and retail agricultural related businesses.
Revenues for the first six months of fiscal 2017 were
$15.4 billion, compared to
$14.4 billion for the first six
months of fiscal 2016, an increase of 7 percent.
"As our operating environment remains challenging, we continue
to act prudently, taking appropriate and measured actions regarding
costs and investments, while positioning ourselves to take
advantage of opportunities as they arise while focusing on return
on our invested capital," said CHS President and Chief Executive
Officer Carl Casale. "We are on a
journey and are starting to see the benefits of our focus."
The CHS Energy segment generated a pretax income of $16.6 million for the second quarter of the 2017
fiscal year, compared to a loss of $63.1
million for the same period in fiscal 2016, representing an
increase of $79.7 million. Results
were primarily due to increased refining margins and a $46.1 million non-cash charge to reduce inventory
to market value in the second quarter of fiscal 2016 that did not
recur in the current year. The company's propane and lubricants
businesses experienced an increase in earnings, partially offset by
a decrease in the company's transportation business compared to the
same period of the prior year. For the first six months of fiscal
2017, the segment generated pre-tax earnings totaled $86.6 million, compared to $129.9 million for the same period last year.
The CHS Ag segment, which includes domestic and global grain
marketing and crop nutrients businesses, renewable fuels, local
retail operations and processing and food ingredients, lost
$9.3 million in the second quarter of
fiscal 2017, compared to a loss of $31.1
million for the second quarter for 2016. Each of the
primary business units in the Ag segment realized increased
earnings during the second quarter of fiscal 2017, as compared to
the second quarter of fiscal 2016, with the exception of country
operations. Grain marketing increased earnings due primarily to
improved grain margins. Wholesale crop nutrients income increased
for the quarter due to higher volumes. Processing and food
ingredients earnings increased due to an impairment charge for
assets held for sale in the prior fiscal year. Earnings from
renewable fuels marketing and production operations also increased,
primarily due to higher margins. These increases were partially
offset by increased loan loss reserves related to the company's
country operations retail business. Absent these reserve
increases, the country operations retail business experienced
strong second quarter operating performance versus the prior year's
second quarter. These earnings were part of the $99.9 million total for the CHS Ag segment for
the first six months of fiscal 2017, compared to $38.1 million for the first six months of fiscal
2016.
The Nitrogen Production segment generated income of $5.5 million during the three months ended
Feb. 28, 2017, compared to income of
$1.3 million over the previous fiscal
year's quarterly period, and $32.4
million for first six months of fiscal 2017 compared to
$1.3 million from the same period in
fiscal 2016. The increase is primarily due to six months of
activity in the current fiscal year, compared to only one month of
activity in the first half of the prior fiscal year, given the CHS
investment in CF Nitrogen occurred in February 2016.
The company's Foods segment, previously reported as a component
of Corporate and Other, generated pretax earnings of $3.1 million during the second quarter of fiscal
2017, a decrease of $8.4 million
compared to $11.5 million for the
same period the fiscal year before, and $13.7 million during the first six months of
fiscal 2017, compared to $29.9
million for the same period of fiscal 2016. The decreases
were primarily due to decreased margins at Ventura Foods, LLC, the
CHS equity method investment that makes up the Foods segment.
Corporate and Other generated pretax income of $7.7 million during the second quarter of fiscal
2017, compared to $4.9 million during
the same time period the previous year, an increase of $2.8 million, or 57 percent, and income of
$16.5 million for the six months
ended Feb. 28, 2017, compared to
$14.2 million during the first six
months of fiscal 2016. Earnings in this category are derived from
the company's equity investment in the Ardent Mills, LLC wheat
milling joint venture and CHS Business Solutions
operations.
CHS Inc. (www.chsinc.com) is a leading global agribusiness owned
by farmers, ranchers and cooperatives across the United States. Diversified in energy,
grains and foods, CHS is committed to helping its customers,
farmer-owners and other stakeholders grow their businesses through
its domestic and global operations. CHS, a Fortune 100 company,
supplies energy, crop nutrients, grain marketing services, animal
feed, food and food ingredients, along with business solutions
including insurance, financial and risk management services. The
company operates petroleum refineries/pipelines and manufactures,
markets and distributes Cenex® brand refined fuels,
lubricants, propane and renewable energy products.
This document and other CHS Inc. publicly available documents
contain, and CHS officers and representatives may from time to time
make, "forward–looking statements" within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Report
Act of 1995. Forward–looking statements can be identified by words
such as "anticipate," "intend," "plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy," "future," "likely,"
"may," "should," "will" and similar references to future periods.
Forward–looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
CHS current beliefs, expectations and assumptions regarding the
future of its businesses, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward–looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of CHS control. CHS actual results and financial
condition may differ materially from those indicated in the
forward–looking statements. Therefore, you should not rely on any
of these forward–looking statements. Important factors that could
cause CHS actual results and financial condition to differ
materially from those indicated in the forward–looking statements
are discussed or identified in CHS public filings made with the
U.S. Securities and Exchange Commission, including in the "Risk
Factors" discussion in Item 1A of CHS Annual Report on Form 10–K
for the fiscal year ended August 31,
2016. Any forward–looking statements made by CHS in this
document are based only on information currently available to CHS
and speak only as of the date on which the statement is made. CHS
undertakes no obligation to publicly update any forward–looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
CHS Inc.
Earnings
By
segment
(in millions
$)
|
|
|
|
|
|
|
For the Three
Months
Ended
|
|
|
For the Six
Months
Ended
|
|
February
28/29,
|
|
|
February
28/29,
|
|
2017
(fiscal
year)
|
|
2016
(fiscal
year)
|
|
|
2017
(fiscal
year)
|
|
2016
(fiscal
year)
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
|
$16.6
|
|
$(63.1)
|
|
|
$86.6
|
|
$129.9
|
Ag
|
(9.3)
|
|
(31.1)
|
|
|
99.9
|
|
38.1
|
Nitrogen
Production
|
5.5
|
|
1.3
|
|
|
32.4
|
|
1.3
|
Foods
|
3.1
|
|
11.5
|
|
|
13.7
|
|
29.9
|
Corporate and
Other
|
7.7
|
|
4.9
|
|
|
16.5
|
|
14.2
|
Income (loss) before
income taxes
|
23.6
|
|
(76.5)
|
|
|
249.1
|
|
213.4
|
Income tax (benefit)
expense
|
8.6
|
|
(46.3)
|
|
|
25.2
|
|
(22.6)
|
Net income
(loss)
|
15.0
|
|
(30.2)
|
|
|
223.9
|
|
236.0
|
Net income (loss)
attributable to non-controlling interests
|
0.4
|
|
0.8
|
|
|
0.2
|
|
0.5
|
Net income
attributable to CHS Inc.
|
$14.6
|
|
$(31.0)
|
|
|
$223.7
|
|
$235.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/chs-reports-fiscal-2017-second-quarter-and-first-half-results-300435580.html
SOURCE CHS Inc.