MINNEAPOLIS, MINNESOTA, US — Driven by increased demand for grains and oilseeds, CHS Inc. on Nov. 4 reported a 31% increase in net income for the fiscal year ended Aug. 31, 2021.
The agribusiness co-operative posted net income of $554 million, up from $131.5 million in fiscal year 2020.
“Our employees once again demonstrated their commitment to delivering products and services to our owners and customers around the world, driving a significant increase in earnings in fiscal year 2021 over the prior year,” said Jay Debertin, president and chief executive officer of CHS Inc. “For the year, overall demand for grain and oilseed helped drive strength in agriculture, as well as crop nutrients and crop protection products and services.
“Based on fiscal year 2021 earnings, the company will return an estimated $50 million in cash patronage and $100 million in equity redemptions to member cooperatives and individual owners in fiscal year 2022.”
The cooperative also posted consolidated revenues of $38.4 billion for fiscal year 2021, which compared with $28.4 billion for fiscal year 2020, a year-over-year increase of 35%.
CHS saw significantly improved earnings in its Ag segment as demand for grains and oilseeds drove commodity prices higher while trade relations improved between the United States and other nations.
The Ag segment posted pre-tax earnings of $298.1 million, which represented a $244.4 million increase over the prior fiscal year.
CHS noted that improved earnings across most of its Ag segment were partially offset by lower grain and oilseed margins, including the impact of mark-to-market losses that are expected to reverse over time.
However, CHS’s energy segment suffered a pre-tax loss of $10.6 million, which represented a $235.9 million decrease versus the prior year.
“While refining margins improved over the course of the year in our refined fuels business as demand shocks from the COVID-19 pandemic began to subside, the resulting margin improvements were negatively impacted 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,” CHS said.
Pretax earnings in the Nitrogen segment increased by $69.2 million to $121 million on higher sale prices of urea and urea ammonium nitrate, which partially was offset by increased natural gas costs.
CHS’s Foods segment also saw a significant increase in pre-tax earnings. Favorable market conditions for edible oils and improved sales volumes for Ventura Foods led to an earnings increase of $43.7 million, to $67.9 million.
Pre-tax earnings increased in the cooperative’s Corporate and Other segment, up $7.1 million, to $38.9 million, primarily due to higher income from its equity method investment in Ardent Mills, as a result of strong sales volumes and improved commodity margins in fiscal year 2021.
“Our investments in innovation are helping drive our financial strength and leading to efficiency gains throughout our expansive network,” Debertin said. “At the same time, we are enhancing the experience of our farmer-owners and customers who rely on CHS to help them meet the growing global demand for agriculture products, opening new opportunities for growth.”