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CHS Sets Record With 2012 Fiscal Earnings

November 7, 2012
By: Davis Michaelsen, Pro Farmer Inputs Monitor Editor

CHS claims the distinction of the first U.S. agricultural cooperative to surpass the $1 billion earnings mark with its fiscal 2012 earnings report today. Net income of $1.26 billion for the year ending August 31, 2012, increased 31% from the $961.4 million reported for fiscal 2011, which was also a record.

CHS also set a new mark for revenues at $40.6 billion in fiscal 2012 largely as a result of increased values for the energy, crop nutrients, grains and other commodities that comprise the majority of the company's business. That figure represents a 10% increase from the previous record of $36.9 billion, also set in fiscal 2011.

Based on fiscal 2012 earnings, CHS expects to return a record nearly $600 million in cash to its owners during fiscal 2013.

"The strength of our diverse CHS business portfolio, along with a strong domestic and global footprint, combined in fiscal 2012 to allow us to successfully navigate continued market volatility and deliver record results for the U.S. farmers, ranchers and cooperatives who own us," said Carl Casale, CHS president and chief executive officer. "Continued strong performance has allowed CHS to invest in growing our business, maintain a strong balance sheet and – most important – return direct economic value to those who own this cooperative."

Strong petroleum refining margins at the company's refineries at Laurel, Montana, and McPherson, Kansas, helped drive record performance within the Energy segment which led overall CHS earnings. CHS also reported strong performance for its propane, and transportation businesses, while lubricants and renewable fuels marketing results were behind those of fiscal 2011.

The overall CHS crop nutrients business recorded strong performance driven by significant product movement in spring 2012. The company's own grain marketing operations performed well under challenging fiscal 2012 market conditions, while processing and food ingredients results declined largely due to acquisition and investment expenses. Overall Ag segment earnings for fiscal 2012 declined from fiscal 2011 which included a pretax gain of $119.7 million on that year's sale of the CHS investment in Multigrain S.A., a Brazil-based joint venture.

As of Now...

CHS Inc. (CHSSCP) found support at 31.00 earlier today before making a strong move to the upside to end the day $0.01 lower at $31.17.

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