ST. PAUL, MINNESOTA, US — With significant earnings growth in all business segments, CHS Inc. posted a 180% increase in net income for the third quarter ended May 31.
The company said net income was $273.6 million, which compared with $97.6 million in the same quarter a year earlier.
The CHS board of directors approved $50 million in additional equity redemptions to member cooperatives and individual owners since the December 2020 annual meeting.
“Robust performance across CHS resulted in a very strong third quarter,” said Jay Debertin, president and chief executive officer 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.”
Revenues of $10.9 billion grew 51% 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.
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.
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, CHS reported net income of $305 million, down from $401 million in 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,” Debertin said. “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.”