CHS Inc. has reported net income of $554.0 million for the fiscal year ended Aug. 31, 2021, reflecting an increase of 31% or $131.5 million compared to fiscal year 2020.
Key financial drivers for fiscal year 2021 include:
- Consolidated revenues of $38.4 billion for fiscal year 2021 compared to $28.4 billion for fiscal year 2020, a year-over-year increase of 35%.
- Significantly improved earnings across our Ag segment compared to the prior year driven by strong global demand for grains and oilseeds which drove commodity prices higher and a full year of improved trade relations between the United States and foreign trade partners.
- Equity earnings from investments, particularly from CF Nitrogen and Ventura Foods, were a significant source of earnings during fiscal year 2021.
- While improved refining margins in our refined fuels business resulted in increased margins as demand shocks from the COVID-19 pandemic began to subside, the resulting margin improvements were more than offset by exceptionally high costs for renewable energy credits and less favorable pricing on heavy Canadian crude oil processed by our refineries, resulting in lower earnings.
"Our employees once again demonstrated their commitment to delivering products and services to our owners and customers around the world, driving a significant increase in earnings in fiscal year 2021 over the prior year," said Jay Debertin, president and CEO of CHS Inc. "For the year, overall demand for grain and oilseed helped drive strength in agriculture, as well as crop nutrients and crop protection products and services. Based on fiscal year 2021 earnings, the company will return an estimated $50 million in cash patronage and $100 million in equity redemptions to member cooperatives and individual owners in fiscal year 2022."
Debertin added, "Our investments in innovation are helping drive our financial strength and leading to efficiency gains throughout our expansive network. At the same time, we are enhancing the experience of our farmer-owners and customers who rely on CHS to help them meet the growing global demand for agriculture products, opening new opportunities for growth."
Fiscal Year 2021 Business Segment Results
The fiscal year 2021 segment results are:
Energy
Pretax loss of $10.6 million represents a $235.9 million decrease versus the prior year and reflects:
- While refining margins improved over the course of the year in our refined fuels business as demand shocks from the COVID-19 pandemic began to subside, the resulting margin improvements were negatively impacted by exceptionally high costs for renewable energy credits and less favorable pricing on heavy Canadian crude oil processed by our refineries, resulting in lower earnings.
Ag
Pretax earnings of $298.1 million represent a $244.4 million increase versus the prior year and reflect:
- Favorable weather conditions for the fall harvest and spring planting seasons, a full year of improved trade relations between the United States and foreign trade partners and favorable market conditions for our processing business during fiscal year 2021 compared to the prior year contributed to increased volumes and margins across most of our Ag segment.
- Improved earnings across most of our Ag segment were partially offset by lower grain and oilseed margins, including the impact of mark-to-market losses that are expected to reverse over time.
Nitrogen Production
Pretax earnings of $121.0 million represent a $69.2 million increase versus the prior year and reflect:
- Higher sale prices of urea and urea ammonium nitrate contributed to the significant earnings increase, which was partially offset by increased natural gas costs.
Foods
Pretax earnings of $67.9 million represent a $43.7 million increase versus prior year and reflect:
- Favorable market conditions for edible oils and improved sales volumes for Ventura Foods, compared with the early stages of the COVID-19 pandemic in fiscal 2020, drove earnings higher.
Corporate and Other
Pretax earnings of $38.9 million represent a $7.1 million increase versus prior year and reflect:
- Earnings increased primarily due to higher income from our equity method investment in Ardent Mills, as a result of strong sales volumes and improved commodity margins in fiscal year 2021.
