ST. PAUL, Minn., Nov. 22 /PRNewswire-FirstCall/ -- CHS Inc. , a leading energy and grain-based foods company, today reported record net income for fiscal 2006 of $490.3 million.
The earnings for the 12-months ending Aug. 31, 2006, compared with net income of $250 million for fiscal 2005 (Sept. 1, 2004 - Aug. 31, 2005). Revenues for fiscal 2006 were $14.4 billion, also a record, and were up 21 percent over $11.9 billion for fiscal 2005.
Earnings for the fourth quarter of fiscal 2006 (June 1 - Aug. 31, 2006) were $159.3 million, compared with $116.4 million for the final quarter of fiscal 2005. Revenues for the quarter were $4.0 billion, up from $3.4 billion the previous year.
The 2006 results mark the third consecutive year of record earnings for the producer-owned cooperative. Market-driven refined fuels earnings led overall results and reflected strong margins generated by the two CHS refineries. CHS is the nation's largest cooperatively owned refiner. Record revenues were attributed to increased market prices for refined fuels and increased values and volume in grain.
A producer-owned cooperative, CHS returns a portion of its earnings to eligible owners. In 2006, based on 2005 performance, the company issued a record $153 million in cash patronage, equity redemptions, preferred stock and dividends. Another record cash return is expected during 2007 based on landmark fiscal 2006 results.
While earnings were led by the performance of the company's energy segment, CHS also achieved strong results in its Ag Business and Processing segments Corporate operations. Ag Business earnings -- which include agronomy, grain marketing and retail operations -- were led by both strong domestic grain markets driven by increased renewable fuels demand and continued growth in export markets, along with increased energy sales and grain movement at the local level. Agronomy earnings were affected by devaluation of crop nutrient inventories due to significant declines in natural gas prices.
Processing earnings increased significantly over fiscal 2005 as oilseed crushing margins improved. CHS reported improved earnings from its share of the Horizon Milling, LLC, wheat milling venture and strong performance from its share of the Ventura Foods, LLC, vegetable oil-based food manufacturing and packaging business. CHS also saw record performance in the Corporate and Other segment which includes its insurance, risk management and financial services businesses.
CHS Inc. ( http://www.chsinc.com/ ) is a diversified energy, grains and foods company committed to providing the essential resources that enrich lives. A Fortune 500 company, CHS is owned by farmers, ranchers and cooperatives from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas, along with thousands of preferred stockholders. CHS provides products and services ranging from grain marketing to food processing to meet the needs of customers around the world. It also operates petroleum refineries/pipelines and, through a broad range of working partnerships, markets and distributes Cenex(R) brand energy products and renewable fuels, along with agronomic inputs and livestock feed to rural America. CHS is listed on the NASDAQ at CHSCP.
This document contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 that are based on management's current expectations and assumptions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. The company undertakes no obligations to publicly revise any forward-looking statements to reflect future events or circumstances. For a discussion of additional factors that may materially affect management's estimates and predictions, please view the CHS Inc. annual report filed on Form 10-K for the year ended Aug. 31, 2006, which can be found on the Securities and Exchange Commission web site ( http://www.sec.gov/ ) or on the CHS web site http://www.chsinc.com/ .
CHS Inc. Earnings
By segment
(in millions $)
Sept. 1- Aug. 31 June 1 - Aug. 31
FY 2006 FY 2005 4thQ 2006 4thQ 2005
Energy $407.6 $185.2 $127.5 $68.7
Ag Business 91.7 92.1 24.5 54.6
Processing 28.5 13.2 6.7 1.2
Corporate & Other 12.2 (20.8) 3.1 (2.8)
Taxes (49.7) (19.7) (2.5) (5.3)
Net income $490.3 $250.0 $159.3 $116.4
