CHS earnings down in first quarter of fiscal 2018
Helped by higher fuel prices but slowed by a sluggish farm economy, CHS Inc.’s net income took a 14 percent hit during the cooperative’s first quarter, the company said.
Quarterly revenue for the global energy, grains and food company was steady at $8 billion for the quarter ended Nov. 30. Net income was $180 million, compared with $209 million for the same period in fiscal 2017.
“Despite challenging market conditions, CHS experienced a solid first quarter thanks to our continued focus on three priorities: strengthening relationships, sharpening operational excellence and restoring financial flexibility,” said CHS President and Chief Executive Officer Jay Debertin in a statement.
The energy segment was a bright spot and generated pretax income of $113 million during the first quarter, compared with $70 million during the same period a year ago. Company officials attributed the increase primarily to improved margins with refined fuels that are marketed under the Cenex brand.
The agriculture segment includes domestic and global grain marketing and crop nutrients businesses, in addition to renewable fuels, local retail operations and processing and food ingredients. It produced pretax income of $74.5 million for the quarter, compared with $109 million in fiscal 2017’s first quarter.
Officials attributed the decrease to lower margins and lower volumes in grain marketing, processing and food ingredients. Crop prices for corn and soybeans have remained low and have changed little during the past four years, following record-high profits for producers in 2011 and 2012.
The company also reported that its investment in sauce and salad dressing maker Ventura Foods has been sluggish, and that lower margins caused income to decline from $10.6 million a year ago to $1 million in the first quarter of fiscal 2018.
Tom Meersman • 612-673-7388