Agricultural News
CHS Reports Third Quarter Earnings, Earnings Reflect Continued Strong Global Demand
Thu, 07 Jul 2022 10:56:03 CDT
Leading global agribusiness CHS Inc. (NASDAQ: CHSCP), the nation's leading agribusiness cooperative, today released results for its third quarter ended May 31, 2022. The company reported third quarter net income of $576.6 million and revenues of $13.1 billion, compared to third quarter fiscal year 2021 net income of $273.6 million and revenues of $10.9 billion. For the first nine months of fiscal year 2022, the company reported net income of $1.2 billion and revenues of $34.4 billion, compared to net income of $305.0 million and revenues of $28.0 billion recorded during the same period of fiscal year 2021.
Fiscal 2022 third quarter highlights:
· Continued strong global demand, coupled with increased market volatility, resulted in higher commodity prices and improved earnings.
· In our Ag segment, processing and wholesale agronomy businesses delivered another strong quarter, building on momentum that began earlier in the fiscal year.
· Refining margins in our Energy segment were higher, driven by robust demand across global energy markets and favorable pricing for Canadian crude oil, which is processed by CHS refineries.
· Certain CHS equity method investments continued to perform exceptionally well, including our CF Nitrogen investment. Favorable market conditions for CF Nitrogen were driven by strong global demand for urea and urea ammonium nitrate.
"Global grains and oilseed market demand remained strong throughout the third quarter," said Jay Debertin, president and CEO of CHS Inc. "Decreased global supply due to geopolitical factors, supply chain disruptions and market volatility also contributed to increased earnings. I am proud of our team's continued dedication to delivering superior value for our farmer-owners and customers in this unprecedented global market."
Debertin added, "The ongoing war in Ukraine has resulted in significant uncertainty and contributed to ongoing volatility across global energy markets. We are leveraging our U.S. refineries to reliably meet the energy needs of CHS customers. We continue to invest on behalf of our owners in infrastructure, supply chain capabilities and innovative technology that is driving operational improvements and efficiency gains throughout our expansive network. And while logistical challenges and inflationary pressures linger, CHS remains well positioned to continue to maximize value for our member cooperative and farmer-owners."
Energy
Pretax earnings of $163.2 million for the third quarter of fiscal year 2022 represent a $158.3 million increase versus the same period a year ago.
· Improved market conditions in our refined fuels business led to increased earnings, driven by higher refining margins and more favorable pricing of heavy Canadian crude oil, partially offset by continuing high renewable energy credit costs.
· The ongoing war in Ukraine has contributed to significant market volatility in crude oil prices as sanctions and other responsive measures have disrupted global supply.
Ag
Pretax earnings of $273.7 million for the third quarter of fiscal year 2022 represent a $133.6 million increase versus the same period a year ago.
· Margins increased significantly in our oilseed processing business, driven by strong meal and oil demand.
· Robust global demand and increased market volatility resulted in higher commodity prices and improved earnings across most of our Ag segment businesses.
Nitrogen Production
Pretax earnings of $178.2 million for the third quarter of fiscal year 2022 represent a $131.6 million increase versus the same period a year ago.
· Our strategic investment in CF Nitrogen continues to perform exceptionally well, due to current market conditions and strong global demand for urea and urea ammonium nitrate.
Corporate and Other
Pretax earnings of $23.6 million for the third quarter of fiscal year 2022 represent a $40.9 million decrease versus the same period a year ago. The lower earnings were due primarily to our joint venture Ventura Foods, LLC, which had exceptionally high earnings in the third quarter of fiscal year 2021, as COVID-19 restrictions began to ease.
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