CHS 2015 Earnings Fall 28% Year on Year on Global Downturn

Minnesota-headquartered CHS Inc., the country’s top farmer-owned cooperative and global grains company, announced earnings of $781 million for fiscal year 2015. This performance represents a 28% decline in earnings year on year from earnings of more than $1.1 billion for the group for fiscal year 2014. The drop in earnings is being attributed to lower margins across the group’s agriculture and energy businesses.

Revenues for fiscal year 2015 were $34.6 billion – a drop of 19% from revenues of $42.7 billion for the previous year, due to a decline in the value of the grains and commodity energy products the group handles. Earnings for CHS’ agriculture segment for fiscal 2015 fell overall due to a $116.5 million impairment having to do with the decision to halt the development of a nitrogen fertilizer plant in Spiritwood, North Dakota. Grain marketing earnings fell on the back of slower logistical performance for 2015 compared to a year before, global currency shifts which were partially offset by increased margins, and growth-related expenses.

The group’s wholesale crop nutrients earnings increased in fiscal 2015 year on year due to increased margins which were offset by decreasing volumes, while the company’s Country Operations local retail, animal nutrition, and sunflower businesses saw earnings decline as a result of lower retain agronomy margins and growth expenses.

CHS’ renewable fuels production, marketing, and operations earnings also fell due to lower ethanol market prices and lower marketing commissions, although these lower earnings were partially offset by production earnings at the company’s two ethanol plants in Illinois.

The group’s Processing and Food Ingredients earnings for fiscal year 2015 increased over fiscal year 2014, as that year’s earnings were affected by an impairment related to its CHS Israel asset.