CHS Q3 earnings decreaseCHS Q3 earnings decrease
July 17, 2015
Lower grain, fertilizer and energy prices contribute to lower CHS earnings.
CHS Inc., the nation's leading farmer-owned cooperative, reported earnings of $649.6 million for the first three quarters of its 2015 fiscal year (Table).
The earnings attributable to CHS for the period (Sept. 1, 2014, to May 31, 2015) represented a decrease of 26% from the $881.7 million reported for the first three quarters of fiscal 2014.
Revenues for the first nine months were $26.6 billion, down 19% from $32.7 billion for the same period a year ago, primarily due to lower average prices for the refined energy products, grains and fertilizer that make up a significant portion of CHS's business.
Earnings for the 2015 third quarter (March 1-May 31) were $178.1 million, down 53% from $379.5 million for the same year-ago period. The 2014 third quarter included a one-time gain of $108.8 million attributed to the establishment of the Ardent Mills flour milling joint venture in May 2014. Fiscal 2015 third-quarter revenues of $8.7 billion declined 28% from the same three-month period a year ago.
For the Energy segment, earnings for the first nine months of 2015 declined primarily due to significantly reduced refining margins and scheduled maintenance at the McPherson, Kan., refinery, and also, to a lesser extent, due to decreased propane earnings.
The CHS Ag segment earnings through the third quarter also declined. This decrease was attributed to lower earnings from logistics within grain marketing compared with the first three quarters of fiscal 2014, as well as lower grain and wholesale crop nutrient volumes.
In addition, CHS retail facilities experienced lower agronomy margins through the third quarter of 2015.
Earnings for CHS's renewable fuel marketing and production operations declined due to lower market prices, which resulted in lower marketing commissions; those lower earnings were partially offset by the 2014 acquisition of a Rochelle, Ill., ethanol plant.
CHS reports results for its business services operations and its two food processing-related joint ventures under the Corporate & Other category, which reported lower earnings through the third quarter of 2015 primarily due to the one-time gain in 2014 associated with the formation of the Ardent Mills joint venture.
In addition to reporting financial results, CHS also announced that it will not issue non-qualified equity to eligible cooperative member-owners as part of its patronage distribution for fiscal 2015.
CHS supplies energy, crop nutrients, grain marketing services, animal feed, food and food ingredients, along with business solutions including insurance, financial and risk management services.
CHS earnings, by segment (million $)
Corporate & Other
Income before income taxes
Net income attributable to non-controlling interests
Net income attributable to CHS Inc.
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