Revenues for fiscal 2017 totaled $31.9 billion, up 5% from $30.3 billion in fiscal 2016.
|Jay Debertin, president and CEO.|
“It’s been a challenging year, but we’re committed to meeting the long-term needs of our cooperative owners and customers,” said Jay Debertin, president and chief executive officer. “We will continue to take prudent actions to ensure the company is well positioned for future opportunities.
CHS said the event in Brazil played a major part in the cooperative’s Ag segment sustaining a loss of $230.8 million in fiscal 2017, which compared with income of $30.9 million a year ago.
Country operations experienced a decrease in pretax income during the year due to changes in reserves related to a single producer borrower and asset impairments, which were significantly offset by higher grain margins and volumes, CHS said. Meanwhile, a decrease in processing and food ingredients pretax income primarily was caused by long-lived asset impairment charges, the cooperative noted. Pretax income for crop nutrients and renewable fuels increased due to higher volumes and higher margins, respectively.
The company’s Foods segment posted income of $26 million in fiscal 2017, down sharply from $64.8 million in fiscal 2016. CHS said the decline reflected reduced margins at Ventura Foods LLC, which is the investment that makes up the Foods segment.
Meanwhile, the cooperative’s Corporate and Other segment generated income of $43.4 million, which compared with $14.7 million during the same period a year ago. Earnings in the category primarily are derived from CHS’s equity investment in the Ardent Mills, LLC wheat milling joint venture and the cooperative’s Business Solutions operations.
In the Energy segment, CHS posted income of $76.9 million, which was down sharply from $275.4 million in fiscal 2016. The cooperative said the decline primarily was due to significantly reduced refining margins and a charge incurred due to a cancelled capital project.
Despite the difficult operating environment sustained in 2017, Debertin said CHS is optimistic heading into fiscal 2018. The cooperative plans to focus on three priorities: strengthening relationships with owners and customers, sharpening focus on operational excellence, and restoring financial flexibility.
“I’m happy to report that we’ve seen progress on these priorities already,” Debertin said. “We are making significant headway toward managing credit risk consistently across the organization and are leveraging our ongoing asset review to drive decisions that will further strengthen our balance sheet.”