CHS reports first quarter fiscal year 2024 earnings

CHS Inc., the nation's leading agribusiness cooperative, released results for its first quarter ended Nov. 30, 2023. The company reported quarterly net income of $522.9 million compared to $782.6 million in the first quarter of fiscal year 2023.

First quarter fiscal year 2024 highlights:

• Earnings were strong across the segments, although down from record first quarter earnings in fiscal year 2023.

• Revenues were $11.4 billion, compared to $12.8 billion in the first quarter of fiscal year 2023.

• In Ag segment, continued robust meal and oil demand drove strong earnings in the oilseed processing business that were offset by weak U.S. export demand for grains and oilseeds.

• Energy segment experienced favorable market conditions in the refined fuels business, reflecting sustained global demand for energy products.

• Equity method investments performed well, with CF Nitrogen investment being the largest contributor.

"CHS earnings were strong for the first quarter, despite a relative decline from last year's record earnings," said Jay Debertin, president and CEO of CHS Inc. "Our focus on execution and efficiency improvements bolstered results across all operations. We continue to see the benefits of our diversified ag and energy portfolio, our strategic footprint and investments in our supply chain. The success of our domestic soybean and canola processing business and our international origination capabilities have helped us add value to our farmer-owners' businesses."

Ag

Pretax earnings of $169.7 million represent a $117.6 million decrease versus the prior year period and reflect:

• Decreased margins for the grain and oilseed and oilseed processing businesses primarily due to mark-to-market timing adjustments and weak U.S. export demand

• Increased demand for wholesale and retail agronomy products as selling prices remained lower due to global market conditions

Nitrogen Production

Pretax earnings of $36.5 million represent a $60.4 million decrease versus the prior year period and reflect lower equity income from CF Nitrogen attributed to decreased market prices of urea and UAN.

Energy

Pretax earnings of $266.8 million represent a $129.8 million decrease versus the prior year period and reflect:

• Decreased refining margins compared to the highs in the previous year due to trade flows returning to more normal levels

• More favorable costs for renewable energy credits

• Higher margins in the propane business

Corporate and Other

Pretax earnings of $43.8 million represent a $7.1 million increase versus the prior year period, primarily reflecting increased interest income due to higher interest rates.