Ag results help boost CHS earnings

by Eric Schroeder
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ST. PAUL, MINN. — Net income at CHS Inc. in the second quarter ended Feb. 28 rose to $82,668,000, up narrowly from $82,280,000 in the same period a year ago. Net sales, meanwhile, rose 14% to $5,878,493,000 from $5,177,069,000.

The company’s Ag Business segment, which consists of CHS’s agronomy, grain marketing and retail operations, posted operating earnings of $53,009,000, up sharply from $22,387,000 in the second quarter of fiscal 2009. Sales in the segment totaled $3,639,718,000, up 7% from $3,416,515,000 a year ago.

“The average sales price of all grain and oilseed commodities sold reflected a decrease of 28c per bushel (4%) over the same three-month period in fiscal 2009,” CHS said in an April 7 filing with the Securities and Exchange Commission. “The average month-end market price per bushel of soybeans and corn increased approximately 26c and 4c, respectively, while the price per bushel of spring wheat decreased $1.23 when compared to the three months ended Feb. 28, 2009. Wheat, soybean, barley, sunflowers and corn all had increased volumes compared to the six months ended Feb. 28, 2009.”

Earnings within CHS Processing operations, which include its oilseed processing, wheat milling, food production and renewable fuels operations, also rose during the quarter. Operating earnings in the second quarter were $2,339,000, up 120% from $1,061,000, while sales fell 2% to $264,503,000 from $270,628,000.

“Our oilseed processing operation net revenues decreased $5.7 million, primarily from a decrease in the average selling price of oilseed refined products, and from volume decreases in our oilseed refinery operations, partially offset by increases in processed (crushed) oilseed products average selling price, as compared to the three months ended Feb. 28, 2009,” CHS said. “Typically, changes in average selling prices of oilseed products are primarily driven by the average market prices of soybeans.”

Energy earnings fell sharply to $18,232,000 from $94,007,000 during the second quarter. Sales, meanwhile, rose to $2,037,528,000 from $1,546,147,000.

For the six months ended Feb. 28, CHS posted net income of $202,618,000, down 8% from $219,531,000 in the same period a year ago. Sales eased to $12,073,734,000 from $12,910,988,000.

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