ST. PAUL, Minn., April 11, 2016 /PRNewswire/ -- CHS Inc. (NASDAQ:
CHSCP, CHSCO, CHSCN, CHSCM, CHSCL), the nation's leading
farmer-owned cooperative and a global energy, grains and foods
company, today reported net income of $235.5
million for the first six months of its 2016 fiscal
year.
CHS net income of $235.5 million
for the period from Sept.1, 2015 through Feb. 29, 2016, reflected a 50 percent decline
from net income of $471.5 million for
the first six months of fiscal 2015. The lower earnings were
attributed to the down economic cycles in the agricultural and
energy sectors, which have resulted in reduced commodity prices and
lower margins globally. These have combined to significantly reduce
CHS profitability. Revenues through Feb. 29,
2016, were $14.4 billion, down
nearly 20 percent from $17.9 billion
for first half of fiscal 2015, and primarily reflected lower
selling prices for the energy, grain and fertilizer products the
company handles.
"Like others in our energy and agricultural space, CHS is
experiencing the earnings impact of depressed global prices and
reduced demand for refined fuels, grain and fertilizer," said CHS
President and Chief Executive Officer Carl
Casale. "We've experienced these types of cycles throughout
our more than 85-year history and will navigate this period by
finding ways to run our businesses more efficiently and effectively
while continuing to serve our owners' and customers' needs."
For the second quarter of fiscal 2016 (Dec. 1, 2015 through Feb.
29, 2016), CHS reported a net loss of $31.0 million compared with earnings of
$92.8 million for the same period in
fiscal 2015. Results for the quarter also were attributed to the
current down cycle in the company's agricultural and energy
businesses. Revenues for the second quarter of fiscal 2016 were
$6.7 billion, down 20 percent
compared with $8.4 billion for the
second quarter of fiscal 2015.
Through the first six months of fiscal 2016, operating income
reflected lower pre-tax earnings in the CHS Energy and Ag segments.
These were partially offset by increased earnings in the Corporate
and Other category, as well as the addition of the company's new
Nitrogen Production segment.
In addition to significantly reduced refining margins, CHS
Energy segment earnings for the first six months of fiscal 2016
included a significant non-cash charge to revalue inventories to
market value. The company's lubricants and transportation
businesses also experienced lower earnings for the six-month
period, while propane earnings increased.
Year-over-year earnings also declined within the CHS Ag segment,
which includes the company's crop nutrients, renewable fuels,
Country Operations retail, animal nutrition and sunflower
processing; grain marketing, and processing and food ingredients
businesses. Lower earnings in this segment were largely attributed
to soft market conditions across the agricultural sectors CHS
serves. Lower margins affected earnings within the crop nutrients,
Country Operations retail and grain marketing businesses. In the
renewable fuels business, earnings declined primarily due to lower
market prices. CHS processing and food ingredients earnings
decreased primarily due to a non-cash impairment charge on assets
held for sale.
With one month of operation in fiscal 2016, CHS generated income
before taxes in its newly established Nitrogen Production segment
of $1.3 million, resulting from its
February 2016 equity method
investment of $2.8 billion in CF
Industries Nitrogen, LLC.
CHS reports results for its business services operations and its
two food processing-related joint ventures under the Corporate and
Other category. Corporate and Other earnings for the first six
months of fiscal 2016 increased over the previous year primarily
due to higher earnings associated with the company's investment in
Ventura Foods, LLC, a manufacturer, packager and distributor of
vegetable oil-based food products.
CHS Inc. (www.chsinc.com) is a leading global agribusiness owned
by farmers, ranchers and cooperatives across the United States. Diversified in energy,
grains and foods, CHS is committed to helping its customers,
farmer-owners and other stakeholders grow their businesses through
its domestic and global operations. CHS, a Fortune 100 company,
supplies energy, crop nutrients, grain marketing services, animal
feed, food and food ingredients, along with business solutions
including insurance, financial and risk management services. The
company operates petroleum refineries/pipelines and manufactures,
markets and distributes Cenex® brand refined fuels,
lubricants, propane and renewable energy products.
This document and other CHS Inc. publicly available documents
contain, and CHS officers and representatives may from time to time
make, "forward–looking statements" within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995. Forward–looking statements can be identified by words
such as "anticipate," "intend," "plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy," "future," "likely,"
"may," "should," "will" and similar references to future periods.
Forward–looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
CHS current beliefs, expectations and assumptions regarding the
future of its businesses, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward–looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of CHS control. CHS actual results and financial
condition may differ materially from those indicated in the
forward–looking statements. Therefore, you should not place undue
reliance on any of these forward–looking statements. Important
factors that could cause CHS actual results and financial condition
to differ materially from those indicated in the forward–looking
statements are discussed or identified in CHS public filings made
with the U.S. Securities and Exchange Commission, including in the
"Risk Factors" discussion in Item 1A of CHS Annual Report on Form
10–K for the fiscal year ended August 31,
2015. Any forward–looking statements made by CHS in this
document are based only on information currently available to CHS
and speak only as of the date on which the statement is made. CHS
undertakes no obligation to publicly update any forward–looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
CHS Inc.
Earnings By segment (in millions
$)
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
February
29,
|
|
February
29,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Energy
|
$(63.1)
|
|
12.1
|
|
129.9
|
|
291.2
|
Ag
|
(31.1)
|
|
61.1
|
|
38.1
|
|
200.4
|
Nitrogen
Production
|
1.3
|
|
--
|
|
1.3
|
|
--
|
Corporate and
Other
|
16.4
|
|
17.3
|
|
44.1
|
|
34.5
|
Income (loss) before
income taxes
|
(76.5)
|
|
90.5
|
|
213.4
|
|
526.1
|
Income tax (benefit)
expense
|
(46.3)
|
|
(2.4)
|
|
(22.6)
|
|
54.9
|
Net income
(loss)
|
(30.2)
|
|
92.9
|
|
236.0
|
|
471.2
|
Net income (loss)
attributable to non-controlling interests
|
0.8
|
|
0.1
|
|
0.5
|
|
(0.3)
|
Net income
attributable to CHS Inc.
|
$(31.0)
|
|
$92.8
|
|
$235.5
|
|
$471.5
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/chs-reports-fiscal-2016-six-month-earnings-of-2355-million-300249440.html
SOURCE CHS Inc.