Strong ag results boost CHS income in quarter

by Eric Schroeder
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ST. PAUL, MINN. — Net income at CHS Inc. in the second quarter ended Feb. 28 rose to $194,598,000, up 135% from $82,668,000 in the second quarter of fiscal 2010.

Revenues for the period also advanced, rising 31% to $7,706,119,000 from $5,878,493,000 in the same period a year ago. Higher sales reflected increased values for the energy, grain and crop nutrients products CHS handles.

The company’s Ag Business segment, which consists of CHS’s agronomy, grain marketing and retail operations, posted operating earnings of $82,883,000, up 45% from $57,358,000 in the second quarter of fiscal 2010. Sales in the segment totaled $5,215,991,000, up 34% from $3,897,632,000 a year ago.

“Grain revenues in our Ag Business segment totaled $4.2 billion and $3 billion during the three months ended Feb. 28, 2011, and 2010, respectively,” CHS said in an April 8 filing with the Securities and Exchange Commission. “Of the grain revenues increase of $1.2 billion (38%), $938.3 million is due to increased average grain selling prices, and $216.5 million is due to a 7% net increase in volumes, during the three months ended Feb. 28, 2011, compared to the same period in the prior fiscal year.

“The average sales price of all grain and oilseed commodities sold reflected an increase of $1.92 per bu (29%) over the same three-month period in fiscal 2010. Soybeans, wheat and corn all had increased volumes compared to the three months ended Feb. 28, 2010.”

CHS said oilseed processing revenues increased 18% during the third quarter to $310.6 million. The increase included $39.1 million from an increase in the average selling price of the company’s oilseed products and a net increase of $8.3 million related to increased volumes.

Energy earnings rose sharply to $107,038,000 from $18,232,000, while sales increased 26% to $2,558,415,000 from $2,037,528,000.

For the six months ended Feb. 28, CHS posted net income of $418,154,000, up 100% from $208,694,000 in the same period a year ago. Sales increased 31% to $15,841,223,000 from $12,073,734,000.

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