CHS net income falls 6 percent on lower energy earnings

Net income of $471.5 million reported for first six months

CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, announced company net income of $471.5 million for the first six months of its 2015 fiscal year.

CHS net income of $471.5 million for Sept. 1, 2014, through Feb. 28, 2015, represented a 6 percent decrease from $502.3 million for the same period of fiscal 2014, primarily attributed to lower earnings within the company’s energy businesses, which were partially offset by improved performance by the company’s ag segment. Revenues of $17.9 billion for the first half of fiscal 2015 were down 14 percent compared with $20.7 billion through the second quarter of fiscal 2014, largely due to lower average selling prices for the commodity energy, grain, fertilizer and processed grains the company handles.

For the second quarter of fiscal 2015 (Dec. 1, 2014-Feb. 28, 2015), CHS reported net income of $92.8 million compared with $260.1 million for the same quarter of fiscal 2014. Revenues for the quarter of $8.4 billion declined from $9.7 billion the same period a year ago.

Earnings within the energy segment declined for the six-month period, primarily due to significantly lower petroleum refining margins during the second quarter, as well as lower propane earnings.

The company’s ag segment – which includes its grain marketing and fertilizer businesses, renewable fuels, local retail operations, and soybean processing and food ingredients – reported increased earnings through the second quarter. Within this segment, wholesale fertilizer margins increased while local retail operations earnings improved due to higher grain volumes and margins. CHS processing business reported increased income. Renewable fuels earnings were flat, while grain marketing earnings declined, primarily due to decreased logistical performance which was partially offset by improved export margins.