ST. PAUL, Minn., Nov. 9, 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 net income of $127.9
million for the fiscal year ended Aug. 31, 2017, compared to net income of
$424.2 million for the fiscal year
ended Aug. 31, 2016. Consolidated
revenues totaled $31.9 billion for
fiscal 2017, approximately a five percent increase over
consolidated revenues of $30.3
billion for fiscal 2016.
"It's been a challenging year, but we're committed to meeting
the long-term needs of our cooperative owners and customers. We
will continue to take prudent actions to ensure the company is well
positioned for future opportunities," said CHS President and Chief
Executive Officer Jay Debertin.
For fiscal 2017, CHS experienced a loss before income taxes of
$54.8 million, down from income
before income taxes of $419.9 million
in fiscal 2016, reflecting significant charges that relate to a
Brazilian trading partner entering into bankruptcy-like proceedings
under Brazilian law, intangible and fixed asset impairments, and
bad debt and loan loss reserve charges, of which a significant
portion relate to a single large producer borrower.
"As fiscal 2018 unfolds, CHS is focusing on three key
priorities: strengthen relationships with owners and customers,
sharpen focus on operational excellence, and restore financial
flexibility," Debertin said. "I'm happy to report that we've seen
progress on these priorities already. We are making significant
headway towards managing credit risk consistently across the
organization and are leveraging our ongoing asset review to drive
decisions that will further strengthen our balance sheet."
For fiscal year 2017 ending on Aug. 31,
2017, reporting segments results are:
- Energy:
Year-over-year income before income taxes declined 72 percent to
$76.9 million, primarily due to
significantly reduced refining margins and a charge incurred for
the write-off of assets associated with a cancelled project. These
decreases were partially offset by higher demand for energy
products, most significantly in refined fuels.
- Ag:
The CHS Ag segment includes domestic and global grain marketing,
wholesale crop nutrients, renewable fuels, local retail operations,
and processing and food ingredients. CHS Ag experienced a
loss before income taxes of $230.8
million for fiscal 2017, compared to income before income
taxes of $30.9 million for fiscal
2016. Grain marketing earnings decreased primarily due to charges
associated with a trading partner in our Brazilian operations
entering bankruptcy-like proceedings under Brazilian law. Country
operations experienced a decrease in pretax income due to changes
in reserves related to a single producer borrower and asset
impairments, which were significantly offset by higher grain
margins and volumes. A decrease in processing and food ingredients
pretax income was primarily caused by long-lived asset impairment
charges. Pretax income for crop nutrients and renewable fuels
increased due to higher volumes and higher margins,
respectively.
- Nitrogen Production:
The Nitrogen Production segment is comprised of the company's
investment in CF Industries Nitrogen, LLC ("CF Nitrogen"), and
generated income before income taxes of $29.7 million during fiscal 2017, compared to
$34.1 million in fiscal 2016. The
decrease is primarily due to downward pressures on the pricing of
urea and urea ammonium nitrate, which are produced and sold by CF
Nitrogen. The decrease was partially offset by a $30.5 million gain from an embedded derivative
associated with CF Nitrogen.
- Food:
The Foods segment is comprised of the company's investment in
Ventura Foods, LLC ("Ventura Foods"), and generated income before
income taxes of $26.0 million during
fiscal 2017, compared to $64.8
million the previous year. The decreases were primarily due
to reduced margins at Ventura Foods.
- Corporate and Other:
The Corporate and Other category is primarily comprised of the
company's wheat milling joint venture and Business Solutions
operations. Year over year income before taxes increased to
$43.4 million, compared to
$14.7 million during fiscal
2016.
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,
2017. 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. Net
Income
|
|
|
|
By
segment
|
|
(in millions
$)
|
|
|
|
For the Twelve
Months
Ended August 31,
|
|
2017
(fiscal
year)
|
|
2016
(fiscal
year)
|
|
|
|
|
Energy
|
76.9
|
|
275.4
|
Ag
|
(230.8)
|
|
30.9
|
Nitrogen
Production
|
29.7
|
|
34.1
|
Foods
|
26.0
|
|
64.8
|
Corporate and
Other
|
43.4
|
|
14.7
|
Income (loss) before
income taxes
|
(54.8)
|
|
419.9
|
Income tax expense
(benefit)
|
(182.1)
|
|
(4.1)
|
Net income
(loss)
|
127.3
|
|
424.0
|
Net income (loss)
attributable to non-controlling interests
|
(0.6)
|
|
(0.2)
|
Net income
attributable to CHS Inc.
|
127.9
|
|
424.2
|
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SOURCE CHS Inc.