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CHS reports decrease in second quarter earnings and revenue

CHS announced a net income of $170.3 million on $9.1 billion revenue, indicating changes in market conditions.

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CHS Inc. announced its financial results for the second quarter ending February 29, 2024. The company reported a net income of $170.3 million on revenues of $9.1 billion. This reflects a decrease compared to the second quarter of fiscal year 2023, where net income stood at $292.3 million with revenues of $11.3 billion. For the first half of fiscal year 2024, CHS reported a net income of $693.2 million and revenues of $20.5 billion, down from $1.1 billion in net income and $24.1 billion in revenues during the same period last year.

Highlights of CHS's second quarter:

  • Agriculture segment: The Ag segment of CHS experienced an earnings increase, buoyed by stronger agronomy markets and stable margins in grain and oilseed. The segment's pretax earnings were $56.9 million, a significant increase from the prior year.
  • Energy segment: Earnings in the Energy segment witnessed a decline due to shifting market conditions and a warmer winter. Pretax earnings were $51.6 million, a decrease of $213.2 million compared to the previous year. Factors affecting this downturn included lower refining margins, decreased demand for propane and refined fuels, and global market conditions affecting propane margins.
  • Nitrogen production: The Nitrogen Production segment reported a decrease in pretax earnings, standing at $37.0 million. This was attributed to lower equity income from CF Nitrogen due to decreased market prices of urea and UAN.
  • Corporate and other: The Corporate and Other segment saw a slight drop in earnings, primarily due to lower equity income from Ventura Foods, which faced less favorable market conditions for edible oils. Pretax earnings in this segment were $40.2 million.

Jay Debertin, President and CEO of CHS Inc., commented on the results, stating, "The first six months of our fiscal year have delivered overall good financial results." He attributed the performance to the company's supply chain investments, diversified portfolio, and the effective integration of technology and human resources.

Despite the decrease in earnings and revenue compared to the record figures of the previous year, CHS Inc. remains positive about its ability to provide essential inputs and services to farmers and local cooperatives, contributing to global food supply efforts.

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