CHS earnings down 53% in third quarter

by World Grain Staff
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ST. PAUL, MINNESOTA, U.S. — CHS Inc. reported on July 10 that earnings for the third quarter dropped 53% to $178.1 million from $379.5 million, which included a one-time gain.

Third quarter 2014 earnings included a one-time gain of $108.8 million attributed to the establishment of the Ardent Mills flour milling joint venture in May 2014.

Fiscal 2015 third quarter revenues of $8.7 billion declined 28% from the same three-month period a year ago.

Earnings for the first three quarters of its 2015 fiscal year dropped 26% to $649.6 million from $881.7 million for the same period a year earlier.

Revenues for first nine months of 2015 were $26.6 billion, down 19% from $32.7 billion for the same period a year ago, primarily due to lower average prices for the refined energy products, grains and fertilizer that make up a significant portion of CHS business.

For the first nine months of 2015, Energy segment earnings declined primarily due to significantly reduced refining margins and scheduled maintenance at its McPherson, Kansas, U.S., refinery, along with, to a lesser extent, decreased propane earnings.

CHS Ag segment earnings through the third quarter also declined. This decrease was attributed to lower earnings from logistics within grain marketing compared with the first three quarters of fiscal 2014, as well as lower grain and wholesale crop nutrients volumes.

In addition, through the third quarter of fiscal 2015, CHS retail facilities experienced lower agronomy margins. Earnings for CHS renewable fuels marketing and production operations declined due to lower market prices which resulted in lower marketing commissions; those lower earnings were partially offset by the 2014 acquisition of a Rochelle, Illinois, U.S., ethanol plant.

CHS reports results for its business services operations and its two food processing-related joint ventures under the Corporate and Other category, which reported lower earnings through the third quarter of fiscal 2015 primarily due to the one-time gain in fiscal 2014 associated with the formation of the Ardent Mills milling joint venture.

In addition to reporting fiscal 2015 third quarter results, CHS announced today that the company will not issue non-qualified equity to eligible cooperative member-owners as part of its patronage distribution for fiscal 2015.

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