ST. PAUL, MINNESOTA, U.S. — CHS Inc. announced on Nov. 7 earnings for fiscal 2013 of $992.4 million, its second-highest net income in history.
Strong energy earnings led CHS financial performance for fiscal 2013, offsetting a challenging year in global agriculture. For fiscal 2013 (Sept. 1, 2012, through Aug. 31, 2013), CHS recorded net income of $992.4 million, a 21% decline from record earnings of $1.26 billion for fiscal 2012.
"Fiscal 2013 was a challenging year for agriculture, but once again the strength of our diverse business portfolio, along with a strong domestic and global footprint, combined to deliver economic value for the U.S. farmers, ranchers and cooperatives who own us," said Carl Casale, CHS president and chief executive officer. "Performance for fiscal 2013, combined with several consecutive years of strong earnings, enabled CHS to invest in growing our business, maintain a strong balance sheet and — most important — return direct economic value to our owners."
In fiscal 2013, based on record fiscal 2012 earnings, CHS returned a landmark $598.9 million in cash patronage, equity redemptions and dividends on preferred stock to its owners. In fiscal 2014, based on 2013 earnings, CHS expects to return an estimated $433 million in cash to its owners, bringing cash returns generated by earnings in fiscal years 2009 through 2013 to an estimated $1.9 billion.
CHS set a new mark for revenues at $44.5 billion for fiscal 2013, an increase of 10 percent over the previous record of $40.6 billion set in fiscal 2012. Fiscal 2013 was the company's third consecutive year of record revenues. The increase was primarily attributed to higher sales volumes within the company's Energy and Ag segments. Average selling prices increased for grain and oilseed products, but declined overall in the Energy segment.
The severe drought that affected the 2012 U.S. crop resulted in reduced export margins for CHS grain marketing and contributed to an earnings decline of 39% from fiscal 2012 for the company's Ag segment. The CHS wholesale crop nutrients business also reported lower earnings compared to fiscal 2012, primarily due to lower product margins and costs associated with a feasibility study under way on a proposed nitrogen fertilizer manufacturing plant. The CHS Country Operations business — primarily local retail operations — also experienced decreased grain margins in fiscal 2013, but overall reported one of its best years on record. CHS processing and food ingredients business also reported lower earnings.
Fiscal 2013 earnings for the company's Energy segment were the company's second best ever, but declined 21% from record fiscal 2012 performance, primarily due to reduced margins resulting from a major maintenance turnaround at the CHS Laurel, Montana, U.S., refinery. Earnings also decreased for the company's propane business, while its lubricants, renewable fuels marketing and transportation businesses reported increased income for fiscal 2013.
For the fourth quarter of fiscal 2013 (June 1-Aug. 31, 2013), CHS reported net income of $122.8 million, down 66% for the same period in fiscal 2012 and attributed primarily to a decline in refined fuels margins in the Energy segment. Revenues for the quarter were $11 billion, compared with $11 billion for the same three-month period in fiscal 2012.
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