CHS earnings rise 13% in third quarter

by Eric Schroeder
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ST. PAUL, MINN. — Net income at CHS Inc. in the third quarter ended May 31 increased to $405,062,000, up 13% from $358,484,000 in the same period a year ago.

Revenues for the period also advanced, rising 4% to $11,022,955,000 from $10,471,672,000 in the same period a year ago.

CHS said earnings for the third quarter reflected strong performance across its energy segment.

The company’s Ag Business segment, which consists of CHS’s agronomy, grain marketing and retail operations, posted operating earnings of $139,857,000, up 33% from $104,837,000 in the same period a year ago. Sales in the segment totaled $7,999,120,000, up 7% from $7,507,069,000 a year ago.

“Grain revenues in our Ag Business segment totaled $5.1 billion and $5.5 billion during the three months ended May 31, 2012, and 2011, respectively,” CHS said in a July 12 filing with the Securities and Exchange Commission. “Of the grain revenues decrease of $413.1 million (8%), $437.5 million was related to a decrease in volume of 8%, partially offset by a $24.4 million increase in the average grain selling prices during the three months ended May 31, 2012, compared to the same period in the prior fiscal year. The average sales price of all grain and oilseed commodities sold was relatively flat compared to the same three-month period in fiscal 2011. Soybeans had increased volumes, while corn and wheat had decreased volumes compared to the three months ended May 31, 2011.

“Our oilseed processing revenues in our Ag Business segment of $413.3 million increased $79.6 million (24%) during the three months ended May 31, 2012, compared to the three months ended May 31, 2011. The net increase in revenues is comprised of $10.3 million from an increase in the average selling price of our oilseed products and an increase of $69.3 million related to increased volumes, as compared to the three months ended May 31, 2011. Typically, changes in average selling prices of oilseed products are primarily driven by the average market prices of soybeans. The increase in volumes is primarily related to our acquisitions of Solbar and an oilseed crushing facility in Creston, Iowa.”

Energy earnings in the third quarter rose 50% to $346,450,000 from $230,251,000, while sales increased 3% to $3,117,272,000 from $3,038,831,000.

For the nine months ended May 31, overall net income was 899,740,000, up 19% from $754,807,000 in the same period a year ago. Net revenues rose 12% to $29,600,926,000 from $26,312,895,000.

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