Higher margins across CHS Ag sector businesses resulted from strong global market conditions and robust demand for crop nutrients and other agronomy products, grains and oilseeds, soyoil and soymeal.

Strong global demand and improved supply chain efficiency generated $452.0 million in Fiscal 2022 first quarter net income

CHS Inc., the nation’s leading agribusiness cooperative, today released results for its first quarter ended Nov. 30, 2021. 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.

Fiscal 2022 first quarter highlights include:

• The Ag segment experienced robust global demand that drove commodity prices higher leading to a significant improvement in earnings compared to the same period during the prior year.
• Strong demand and global market forces in the agronomy business resulted in improved earnings compared to the first quarter of 2021.
• Refining margins were higher in our Energy segment and we also experienced more favorable pricing for Canadian crude oil which is processed by our refineries.
• Equity earnings from the company’s CF Nitrogen investment improved as a result of increased urea and urea ammonium nitrate pricing due to favorable market conditions. 

“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.

“Our Energy segment continues to see both margin and volume expansion driven by increased global demand. I remain positive for the year ahead as we continue to improve the customer experience and create efficiency gains throughout our expansive network, all of which is leading to increased market access, added value and sustainable growth for our local cooperative and farmer owners.”

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 our refined fuels business led to increased earnings, driven by higher refining margins and more favorable pricing of heavy Canadian crude oil processed by our 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 our 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 our investment in Ventura Foods, which experienced less favorable market conditions for edible oils.

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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, financial condition and results of operations, 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 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, 2021. These factors may include: changes in commodity prices; the impact of government policies, mandates, regulations and trade agreements; global and regional political, economic, legal and other risks of doing business globally; the impact of the ongoing COVID-19 outbreak or other similar outbreaks; the impact of market acceptance of alternatives to refined petroleum products; consolidation among our suppliers and customers; nonperformance by contractual counterparties; changes in federal income tax laws or our tax status; the impact of compliance or noncompliance with applicable laws and regulations; the impact of any governmental investigations; the impact of environmental liabilities and litigation; actual or perceived quality, safety or health risks associated with our products; the impact of seasonality; the effectiveness of our risk management strategies; business interruptions and casualty losses; the impact of workforce factors; our funding needs and financing sources; financial institutions’ and other capital sources’ policies concerning energy-related businesses; uncertainty regarding the transition away from LIBOR and the replacement of LIBOR with an alternative reference rate; technological improvements that decrease the demand for our agronomy and energy products; our ability to complete, integrate and benefit from acquisitions, strategic alliances, joint ventures, divestitures and other nonordinary course-of-business events; security breaches or other disruptions to our information technology systems or assets; the impact of our environmental, social and governance practices; the impairment of long-lived assets; and other factors affecting our businesses generally. 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 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 except as required by applicable law.

31% increase in net income over prior fiscal year; Strong global demand for grains and oilseeds drive results

CHS Inc. reported net income of $554.0 million for the fiscal year ended Aug. 31, 2021, reflecting an increase of 31% or $131.5 million compared to fiscal year 2020.

Key financial drivers for fiscal year 2021 include:

• Consolidated revenues of $38.4 billion for fiscal year 2021 compared to $28.4 billion for fiscal year 2020, a year-over-year increase of 35%. 
• Significantly improved earnings across our Ag segment compared to the prior year driven by strong global demand for grains and oilseeds which drove commodity prices higher and a full year of improved trade relations between the United States and foreign trade partners. 
• Equity earnings from investments, particularly from CF Nitrogen and Ventura Foods, were a significant source of earnings during fiscal year 2021.
• While improved refining margins in our refined fuels business resulted in increased margins as demand shocks from the COVID-19 pandemic began to subside, the resulting margin improvements were more than offset by exceptionally high costs for renewable energy credits and less favorable pricing on heavy Canadian crude oil processed by our refineries, resulting in lower earnings.

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Strongest third-quarter net earnings since 2014; $50 million of additional owner equity redemptions authorized in 2021

CHS Inc. released results for its fiscal third quarter ended May 31, 2021. The company reported net income of $273.6 million compared to $97.6 million in the third quarter of fiscal year 2020, an increase of 180.2%. Significant year-over-year earnings growth in all business segments — Energy, Ag and Nitrogen Production — and Corporate and Other businesses each contributed to the increase.

Reflecting strong company performance, the CHS Board of Directors has approved $50 million in additional equity redemptions to member cooperatives and individual owners since the December 2020 CHS Annual Meeting. The increase is incremental to $33 million in approved equity redemptions announced at the 2020 annual meeting, for a total of $83 million in planned owner equity redemptions in fiscal 2021. A distribution of $30 million in cash patronage was also made to owners in early calendar 2021, based on business transacted with CHS in fiscal 2020.

“Robust performance across CHS resulted in a very strong third quarter,” said Jay Debertin, president and CEO of CHS Inc. “Strong global demand in agricultural markets and the hard work we have been doing to gain efficiencies across our supply chain led to higher volumes in nearly every business area, significantly improving our Ag segment earnings compared to the prior year’s third quarter.

“We also are seeing increasing momentum in pandemic recovery as restrictions ease and vaccination efforts progress, which has had a favorable impact on our Energy segment results and overall performance.”

Fiscal 2021 third-quarter highlights

• Revenues of $10.9 billion grew 50.9% from $7.2 billion in the third quarter of fiscal 2020.
• Earnings were up by more than 40% across all business segments (and Corporate and Other businesses) compared to both the second quarter of fiscal 2021 and the third quarter of the previous fiscal year.

Energy segment results

• Improved refined fuels margins resulted in fiscal 2021 third quarter margin gains, as did the absence of a $42.0 million noncash charge to reduce refined fuels inventories to their market value that impacted the prior year’s third quarter, but did not reoccur in the third quarter of fiscal 2021.
• Improved margins in the company’s refined fuels business were partially offset by significantly higher prices of renewable energy credits that had a negative impact on margins of approximately $82.0 million, less favorable pricing on heavy Canadian crude oil and lower propane margins due to the reversal of hedging gains recognized during the prior year.
• Overall, revenues increased by 24.2% and earnings increased by $59.6 million over the fiscal 2021 second quarter, reflecting volume and margin recovery from the effects of the pandemic.

Ag segment results

• Strong global demand drove commodity prices higher, and improved trade relations between the United States and foreign trade partners led to continued higher volumes for grain and oilseed, which significantly improved Ag segment earnings compared to the prior year’s third quarter.
• Higher overall margins were partially offset by mark-to-market losses for certain processing and food ingredients products, which the company expects to reverse over time.
• Lower volumes of feed and farm supplies were partially offset by increased volumes for agronomy products, stemming from stronger demand due to favorable weather conditions, compared with the previous year’s third quarter.

Other focus areas

• Nitrogen Production segment earnings increased in the quarter due to higher income attributed to increased sale prices of urea and urea ammonium nitrate.
• Favorable market conditions for edible oils and a recovery in sales volumes compared to earlier in the pandemic drove significantly increased income through the company’s investment in Ventura Foods, LLC.
• Focused cost-reduction initiatives, launched in fiscal 2021, continued to gain traction in reducing year-to-date marketing, general and administrative expenses.
• The company began to bring employees back to its global offices in full or hybrid capacities as pandemic restrictions lifted. The costs of these activities are not expected to be material.

For the nine months ended May 31, 2021, CHS reported net income of $305.0 million versus $401.0 million for the same period in fiscal 2020.

“We are encouraged by overall improvements in the global economy and the positive traction we’re gaining at CHS with initiatives focused on working more efficiently and effectively throughout the enterprise,” said Debertin. “We are optimistic conditions will continue to improve over the next 12 months. The resilience of our employees and their commitment to our owners and customers has been inspiring and we look forward to the future and continued shared success.”

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, financial condition and results of operations, 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 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, 2020, and Item 1A of Part II of CHS Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2021. These factors may include: changes in commodity prices; the impact of government policies, mandates, regulations and trade agreements; global and regional political, economic, legal and other risks of doing business globally; the impact of the ongoing COVID-19 outbreak or other similar outbreaks; the impact of market acceptance of alternatives to refined petroleum products; consolidation among our suppliers and customers; nonperformance by contractual counterparties; changes in federal income tax laws or our tax status; the impact of compliance or noncompliance with applicable laws and regulations; the impact of any governmental investigations; the impact of environmental liabilities; actual or perceived quality, safety or health risks associated with our products; the impact of seasonality; the effectiveness of our risk management strategies; business interruptions and casualty losses; the impact of workforce factors; our funding needs and financing sources; changes in the method of determining, or the replacement of, LIBOR; technological improvements that decrease the demand for our agronomy and energy products; our ability to complete, integrate and benefit from acquisitions, strategic alliances, joint ventures, divestitures and other nonordinary course-of-business events; security breaches or other disruptions to our information technology systems or assets; the impact of our environmental, social and governance practices; the impairment of long-lived assets; and other factors affecting our businesses generally. 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 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 except as required by applicable law.

CHS Inc., the nation’s leading agribusiness cooperative, today released results for its fiscal second quarter ended Feb. 28, 2021. The company reported a net loss of $38.2 million 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. 
• Energy segment impacts that include:  
  • Continued low refining margins stemming from COVID-19-impacts on global energy demand.
  • Exceptionally high costs of renewable energy credits, which decreased margins.
  • Decreased propane margins and volumes due to warm winter weather conditions across the CHS trade territory during most of the fiscal 2021 second quarter.
  • Modest improvements over fiscal 2021 first quarter as volumes and margins began to rebound. 
• Ag segment impacts that include:  
  • Favorable weather conditions and improved relations between the U.S. and foreign trade partners, including China, that increased volumes of grain and oilseed commodities as well as feed and farm supplies.
  • Higher margins for certain agricultural products, including processing and food ingredients, which improved because of soybean crush strength.
• Enterprisewide initiatives that include:  
  • 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.

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.”

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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 Report 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 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, 2020. 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 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 except as required by applicable law.