CHS, an agribusiness cooperative, released results for its first quarter ended November 30, 2021.
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The company reported record quarterly net income of $452.0 million compared to $69.7 million in the first quarter of fiscal year 2021.
The significant improvement in earnings was largely driven by strong global demand across key businesses compared with lower demand during the same period a year ago as a result of the COVID-19 pandemic.
"Our exceptionally strong financial performance in the first quarter of fiscal year 2022 reflects the support of local cooperatives and producers, as well as the hard work and dedication of our employees around the world, who remain focused on delivering superior value for our owners.
"That support and hard work, along with the investments we continue to make in critical assets and technology advancements are leading to operational improvements and stronger customer engagement, which are driving earnings momentum," said Jay Debertin, president and CEO of CHS Inc.
Energy
Pretax earnings of $69.2 million represent a $136.4 million increase versus the same period a year ago and reflect:
Improved market conditions in refined fuels business led to increased earnings, driven by higher refining margins and more favorable pricing of heavy Canadian crude oil processed by two CHS refineries.
Higher refining margins were partially offset by the higher cost of renewable energy credits compared to a year ago. Additionally, lower propane margins due to the reversal of unrealized hedging gains also impacted the first quarter of fiscal 2022.
Ag
Pretax earnings of $286.4 million represent a $203.4 million increase versus the same period a year ago and reflect:
Higher margins across all Ag segment businesses resulted from strong global market conditions and robust demand for agronomy products, grains and oilseeds, soyoil and soymeal.
Lower volumes in the quarter were attributable to a smaller overall wheat crop due to drought conditions in some parts of the United States and the impact from Hurricane Ida on the Gulf Coast.
Nitrogen Production
Pretax earnings of $96.6 million represents a $92.1 million increase versus the same period a year ago and reflect:
Higher equity method income attributed to strong demand and increased prices of urea and urea ammonium nitrate which are produced and sold by CF Nitrogen.
Corporate and Other
Pretax earnings of $14.5 million represent a $10.3 million decrease versus the same period a year ago and reflect:
Lower equity income from investment in Ventura Foods, which experienced less favorable market conditions for edible oils. ■