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Serving: United States

CHS reports $38 million net loss

Duncan Smith/ThinkstockPhotos Earnings headline
Warm weather decreases propane volumes, while improved trade relations fuel ag earnings.

CHS Inc. reported a net loss of $38.2 million in its fiscal second quarter ended Feb. 28, 2021, versus net income of $125.4 million in the same quarter in fiscal 2020.

Significant year-over-year earnings increases in ag and nitrogen production segments and corporate and other businesses were offset primarily by ongoing COVID-19 pandemic-related impacts in energy.

"Improved trade relations between the United States and foreign trade partners combined with our operating efficiency initiatives led to record grain and oilseed volume increases and continued price gains, significantly improving our ag segment earnings over the prior year," said Jay Debertin, president and CEO of CHS Inc. "Additionally, favorable growing conditions and overall strength in agriculture, helped drive demand for crop inputs, including crop nutrients and crop protection products and services.

"Our energy segment, while showing improvement over the previous quarter, continues to experience unfavorable refined fuels market conditions related to the COVID-19 pandemic and exceptionally higher costs for renewable energy credits. These factors resulted in volume and margin declines that significantly reduced earnings compared to the prior year."

Fiscal 2021 second-quarter results reflect:

  • Revenues of $8.3 billion versus $6.6 billion in fiscal 2020 second quarter, a 26.1% increase.
  • Decreased propane margins and volumes due to warm winter weather conditions across the CHS trade territory during most of the fiscal 2021 second quarter.
  • Higher margins for certain agricultural products, including processing and food ingredients, which improved because of soybean crush strength.
  • Focused cost-reduction initiatives launched in fiscal 2021 that helped reduce marketing, general and administrative costs.
  • COVID-19-related working arrangements and increased hygiene and infection-control processes to mitigate risk and support business continuity – all CHS operations were deemed to be essential infrastructure industries by federal and state governments.

Six-month look

For the six-month period ending Feb. 28, 2021, CHS reported net income of $31.4 million versus $303.3 million for the same period in fiscal 2020. Revenues for the first six months of fiscal 2021 rose to $17.0 billion, a $2.8 billion, or 19.8%, increase from $14.2 billion in the same period the previous year.

"I am encouraged by the resilience of our employees and their commitment to owners in what continues to be a challenging operating environment," said Debertin. "We are cautiously optimistic about the rollout of COVID-19 vaccines and other progress being made in response to the pandemic in the U.S. and around the world and the potential impact on our domestic and global businesses.

"As we look ahead to the second half of fiscal 2021, we remain committed to protecting the financial health of CHS, adding efficiency throughout our enterprise to benefit owners and customers, and caring for those who depend on us as we continue creating connections to empower agriculture."

Source: CHS Inc., which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 
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