ST. PAUL, Minn., July 14, 2017 /PRNewswire/ -- CHS Inc. (NASDAQ:
CHSCP, CHSCO, CHSCN, CHSCM, CHSCL), the nation's leading
farmer-owned cooperative and a global energy, grains and foods
company, today reported a net loss of $45.2
million for the third quarter of its 2017 fiscal year
(three-month period ended May 31,
2017), compared to net income of $190.3 million for the same period one year ago.
Consolidated revenues for the third quarter were $8.6 billion, compared to $7.8 billion for the third quarter of 2016,
representing a 10 percent increase.
"Despite the economic challenges in agriculture and energy,
several of our underlying businesses are having a solid year," said
CHS President and Chief Executive Officer Jay Debertin. "Unfortunately, we've experienced
three negative one-time events this fiscal year that have resulted
in charges leading to a loss in the third quarter and a significant
earnings decline for the year to date. In response to these events,
we are implementing measures to better identify risk management
gaps in some of our processes and when necessary enhance our
ability to effectively manage our risks."
Pretax income for the nine-month period ended May 31, 2017, was $40.0
million, compared to $407.9
million for the nine-month period ended May 31, 2016. The decrease is primarily the
result of charges related to a Brazilian trading partner entering
into bankruptcy proceedings under Brazilian law, loan loss reserve
charges, of which a significant portion relate to a single large
producer borrower, and asset impairment charges.
Revenues for the nine-month period ended May 31, 2017, were $24.0
billion, compared to $22.2
billion for the nine-month period ended May 31, 2016, an increase of 8 percent.
"Throughout the world, agriculture and energy markets remain
unpredictable and our owners and customers depend on us, so it's
our job to be prepared to succeed in any economic environment,"
said Debertin. "That's why we're committed to improving our risk
management practices across our businesses. Additionally we are
refocusing on the areas we know best and in parts of the world
where we need to be to serve the U.S. farmer. We will do this based
on the core values and tenets CHS has built on for more than 85
years: trust, partnership and opportunity."
The CHS Energy segment experienced a loss before income taxes of
$9.3 million for the three months
ended May 31, 2017, compared to
income before taxes of $109.4 million
for the same period in fiscal 2016. Results were primarily due to
significantly reduced refining margins and a $32.7 million charge incurred due to a cancelled
capital project. The company's propane, transportation and
lubricants businesses experienced decreases in earnings compared to
the same period a year ago.
The CHS Ag segment, which includes domestic and global grain
marketing and crop nutrients businesses, renewable fuels, local
retail operations, and processing and food ingredients, generated a
loss before income taxes of $221.2
million for the three months ended May 31, 2017, compared to income before taxes of
$24.2 million for the same period in
fiscal 2016. Grain marketing earnings decreased primarily due to a
$230 million charge driven by a
trading partner in Brazil entering
bankruptcy proceedings under Brazilian law. The wholesale crop
nutrients and renewable fuels businesses experienced decreases due
to lower margins. The processing and food ingredients business
earnings decreased primarily due to impairment charges taken on
certain assets during the three months ended May 31, 2017. Country Operations earnings
increased due primarily to increased volumes.
The Nitrogen Production segment generated income of $8.7 million during the third quarter, compared
to $25.0 million during the same
period last year. The decrease is primarily due to lower production
margins.
The company's Foods segment, previously reported as a component
of Corporate and Other, generated pretax earnings of $7.0 million during the third quarter of fiscal
2017, compared to $17.0 million in
the same period the previous year. The decreases were primarily due
to reduced margins at Ventura Foods, LLC, the investment that makes
up the Foods segment.
The Corporate and Other segment generated pretax income of
$5.6 million during the third quarter
of fiscal 2017, compared to $18.9
million during the same time period the previous year.
Earnings in this category are primarily derived from the company's
equity investment in the Ardent Mills, LLC, wheat milling joint
venture and our Business Solutions operations.
CHS Inc. (www.chsinc.com) is a leading global agribusiness owned
by farmers, ranchers and cooperatives across the United States. Diversified in energy,
grains and foods, CHS is committed to helping its customers,
farmer-owners and other stakeholders grow their businesses through
its domestic and global operations. CHS, a Fortune 100 company,
supplies energy, crop nutrients, grain marketing services, animal
feed, food and food ingredients, along with business solutions
including insurance, financial and risk management services. The
company operates petroleum refineries/pipelines and manufactures,
markets and distributes Cenex® brand refined fuels,
lubricants, propane and renewable energy products.
This document and other CHS Inc. publicly available documents
contain, and CHS officers and representatives may from time to time
make, "forward–looking statements" within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Report
Act of 1995. Forward–looking statements can be identified by words
such as "anticipate," "intend," "plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy," "future," "likely,"
"may," "should," "will" and similar references to future periods.
Forward–looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
CHS current beliefs, expectations and assumptions regarding the
future of its businesses, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward–looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of CHS control. CHS actual results and financial
condition may differ materially from those indicated in the
forward–looking statements. Therefore, you should not rely on any
of these forward–looking statements. Important factors that could
cause CHS actual results and financial condition to differ
materially from those indicated in the forward–looking statements
are discussed or identified in CHS public filings made with the
U.S. Securities and Exchange Commission, including in the "Risk
Factors" discussion in Item 1A of CHS Annual Report on Form 10–K
for the fiscal year ended August 31,
2016. Any forward–looking statements made by CHS in this
document are based only on information currently available to CHS
and speak only as of the date on which the statement is made. CHS
undertakes no obligation to publicly update any forward–looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
CHS Inc.
Earnings
|
By
segment
|
(in millions
$)
|
|
|
For the Three
Months
Ended
|
|
|
For the Nine
Months
Ended
|
|
May
31,
|
|
|
May
31,
|
|
2017
(fiscal year)
|
|
2016
(fiscal year)
|
|
|
2017
(fiscal year)
|
|
2016
(fiscal year)
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
|
(9.3)
|
|
109.4
|
|
|
77.3
|
|
239.2
|
Ag
|
(221.2)
|
|
24.2
|
|
|
(121.3)
|
|
62.4
|
Nitrogen
Production
|
8.7
|
|
25.0
|
|
|
41.2
|
|
26.3
|
Foods
|
7.0
|
|
17.0
|
|
|
20.7
|
|
46.9
|
Corporate and
Other
|
5.6
|
|
18.9
|
|
|
22.1
|
|
33.1
|
Income (loss) before
income taxes
|
(209.2)
|
|
194.5
|
|
|
40.0
|
|
407.9
|
Income tax (benefit)
expense
|
(163.0)
|
|
4.8
|
|
|
(137.8)
|
|
(17.8)
|
Net income
(loss)
|
(46.2)
|
|
189.7
|
|
|
177.8
|
|
425.7
|
Net income (loss)
attributable to non-controlling interests
|
(1.0)
|
|
(0.6)
|
|
|
(0.7)
|
|
(.1)
|
Net income
attributable to CHS Inc.
|
(45.2)
|
|
190.3
|
|
|
178.5
|
|
425.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/chs-reports-fiscal-2017-third-quarter-results-300488661.html
SOURCE CHS Inc.