CHS reports fiscal H1 net earnings of US$502.3M, down 19% from year-ago period; revenue falls 4% to US$20.7B, partly due to decline in commodity prices for refined fuels

Nevin Barich

ST. PAUL, Minnesota , April 3, 2014 (press release) – CHS Inc. (NASDAQ: CHSCP), an energy, grains and foods company and the nation's leading farmer-owned cooperative, today reported earnings of $502.3 million through the second quarter of its 2014 fiscal year.

Earnings attributed to CHS operations for the first six months of fiscal 2014 (Sept. 1, 2013 – Feb. 28, 2014) declined 19 percent from the $618.8 million reported for the first half of fiscal 2013. Revenues for the six-month period of fiscal 2014 were $20.7 billion, compared with $21.6 billion for the same period of fiscal 2013, reflecting a 4 percent decrease, primarily due to a decline in commodity prices for refined fuels and many of the grain, crop nutrients and processed oilseed products the company handles.

For the second quarter (Dec. 1, 2013 – Feb. 28, 2014), CHS posted earnings of $260.1 million, compared with $275.1 million reported for the same period of fiscal 2013. Revenues for the quarter were $9.7 billion, compared with $9.9 billion for the second quarter of fiscal 2013.

Results through the second quarter reflected lower overall earnings for the company's Energy segment due to lower refined fuels margins. This was partially offset by strong results for its renewable fuels marketing, propane, lubricants and transportation businesses.

Six-month earnings were lower for the Ag segment primarily due to decreased margins in CHS wholesale crop nutrients business, as well as expenses associated with the proposed fertilizer plant at Spiritwood, N.D. CHS grain marketing and locally controlled Country Operations retail businesses reported improved earnings for the six-month period due to strong logistical performance and improved margins. CHS processing and food ingredients operations recorded lower earnings overall, primarily due to lower soybean crushing margins.

CHS reports results for its business services operations and its two food processing-related joint ventures under the Corporate and Other category which increased overall earnings through the second quarter of fiscal 2014. Earnings declined for the company financing, insurance and hedging businesses, but rose for its portion of earnings generated by Ventura Foods, LLC, a packaged food joint venture, and Horizon Milling, a wheat milling joint venture.

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.

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