CHS Posts Record Earnings Driven by Energy Biz

CHS’ energy segment saw quarterly earnings triple, helping to push the company’s total earnings past its 2008 record.

Inver Grove Heights-based energy, grains, and food cooperative CHS, Inc., reported record earnings for the first half of its 2013 fiscal year, due in large part to growth in its energy sector.
Earnings in the first two quarters of the 2013 fiscal year increased 25 percent from the same period a year ago, from $494.7 million to $618.8 million, breaking the previous six-month earnings record set in 2008. Revenue increased during the period from $18.6 billion to $21.6 billion.
A large portion of CHS’ success was driven by its energy business. The company’s energy segment, which includes propane and renewable fuels marketing, transportation, and lubricants, saw earnings increase from $42.1 million to $234.2 million for the quarter that ended February 28. This growth drove total quarterly profits to more than triple from $78.5 million the previous fiscal year to $275.1 million. Only the lubricants section of the energy business saw a decline. Total revenue for the quarter was $9.9 billion, compared with $8.8 billion in fiscal 2012.
CHS also saw increased earnings in its financing, insurance, and hedging businesses, in which earnings increased from $23.8 million during the first six months of the previous year to $31.3 million during the first six months of the current fiscal year.
The six-month earnings growth was less substantial in the company’s agricultural sector, which consists of crop nutrients, grain marketing, processing, and food ingredients. Grain marketing saw lower earnings due to reduced margins, while crop nutrients saw improved margins and increased volumes. The sector’s earnings increased from $157.5 million to $162.8 million.
CHS, which is the nation’s largest co-op, returned $600 million to its owners in February, which it said was the largest cash return ever by a U.S. cooperative, after seeing a record net income of $1.26 billion for its last fiscal year.