January 12, 2010
CHS posts lower earnings for 1Q
CHS Inc., a leading energy and grain-based foods company, reported net income from company operations of US$120 million for the first quarter of its 2010 fiscal year.
For the quarter from September 1 to November 30, 2009, the US$120 million in net income attributable to CHS operations compared with US$137.3 million for the same period of fiscal 2009.
Revenues were US$6.2 billion, down from US$7.7 billion for the first quarter of fiscal 2009, reflecting lower values in the first quarter of fiscal 2010 for grain and crop nutrient products the company handles compared with first quarter 2009.
Increased product margins and increased demand for both grain and crop nutrients contributed to significantly improved earnings within the company''s Ag Business segment for the first quarter of fiscal 2010. CHS local retail operations also turned in strong performance for the quarter.
The company''s first quarter 2010 processing segment earnings increased over the same period a year ago, driven by both strong performance by its wholly owned oilseed processing operations and improved results for its portions of the Ventura Foods, LLC, vegetable oil-based food joint venture and Horizon Milling, LLC, wheat milling joint ventures.
During the first quarter of fiscal 2009, CHS recorded an impairment of US$70.7 million on its ownership in VeraSun Energy Corp. CHS no longer has a VeraSun investment value recorded.
CHS financing, insurance services and hedging businesses, recorded under Corporate and Other, reported slightly lower earnings for the first quarter of fiscal 2010, attributed in part to reduced market volatility, soft insurance markets and low interest rates.