CHS Reports $229.3M Net Income for Third Quarter
Co-op attributes higher operating margins in the company's ag, energy segments
CHS Inc., a leading farmer-owned cooperative and a global energy, grains and foods company, reported net income of $229.3 million for the third quarter of its 2018 fiscal year, compared to a net loss of $45.2 million for the same time period a year ago.
Consolidated revenues for the third quarter of fiscal 2018 were $9.0 billion, up from $8.6 billion for the third quarter of fiscal 2017. Pretax income was $289.4 million for the third quarter of fiscal 2018, compared to a loss of $209.2 million for the same period the prior fiscal year.
"Thanks to the hard work of many throughout CHS, we've made great strides this year in strengthening relationships, optimizing operations and improving results from our core businesses," says CHS President and CEO Jay Debertin. "The steps we've taken will better position us to navigate the inevitable cycles in agriculture and energy."
For the first nine months of fiscal 2018 (Sept. 1, 2017, through May 31, 2018), CHS reported net income of $576.1 million compared with earnings of $178.5 million for the same period in fiscal 2017. Revenues for the first nine months of fiscal 2018 were $23.9 billion, on par with the same time period the prior fiscal year.
Results for the quarter were attributed to:
- Higher operating margins in the company's Ag and Energy segments compared to prior years, primarily driven by higher margins in feed and farm supplies, crop nutrients, processing and food ingredients and refined fuels
- Higher volumes in the Ag segment compared to the same quarter prior year were driven by feed and farm supplies, and processing and food ingredients.
- Sales of certain assets and businesses within the Energy segment and Corporate and Other, resulting in cash proceeds that were used to eliminate the need for incremental long-term debt and reduce existing debt.
- The impact of reserve and impairment charges recorded in the third quarter of fiscal 2017 that did not reoccur in the current fiscal year, as well as the recovery of certain reserve and impairment charges during fiscal 2018, primarily in our Ag segment.
"We're on the right path, and the cooperative system's strengths and capabilities were evident during the compressed spring season," says Debertin. "We will continue to focus on meeting the needs of farmers and rural communities, leveraging our strong supply chain to help improve profitability for our owners."