CHS Announces Q2 Fiscal Year 2025 Financial Results
CHS Inc., the nation’s leading agribusiness cooperative, has announced its financial results for the second quarter of fiscal year 2025. The company reported a net loss of $75.8 million and total revenues of $7.8 billion for the quarter ending on February 28, 2025. This represents a significant decline compared to the second quarter of fiscal year 2024, when the company posted a net income of $170.3 million and revenues of $9.1 billion. For the first six months of fiscal year 2025, CHS reported net income of $169.0 million and revenues of $17.1 billion, a stark contrast to the $693.2 million in net income and $20.5 billion in revenues recorded during the same period in fiscal year 2024.
Key Highlights of the Second Quarter Fiscal Year 2025 Financial Results
While CHS continues to see strong sales volumes across its business segments, profitability has been impacted by shifting market conditions, policy uncertainties, and economic volatility. The company faced challenges in both its Energy and Ag segments, leading to decreased earnings compared to the previous fiscal year.
- The Energy segment experienced a sharp decline in earnings due to evolving market dynamics that negatively impacted refining margins.
- The Ag segment reported weaker earnings, driven by lower grain and oilseed margins. This was largely a result of a more competitive global marketplace and timing impacts related to mark-to-market accounting adjustments.
- CHS’s equity method investments performed well, with CF Nitrogen remaining the largest contributor to earnings in this category.
CHS President and CEO Jay Debertin acknowledged the challenges faced by the company but expressed confidence in its ability to navigate the current economic landscape.
“CHS remains focused on operational excellence and enhancing efficiency as we navigate this time of softer commodity markets, policy uncertainty, and volatility,” Debertin said. “I commend our employees around the world for their commitment to strong execution in this challenging environment. While margin and pricing pressures continue to affect our agricultural and energy product categories, our sales volumes remain strong. We are well positioned to support our owners’ spring planting needs with the necessary inputs, services, and local expertise.”
Segment-Specific Financial Performance
Energy Segment
The CHS Energy segment reported a pretax loss of $83.5 million, marking a significant $135.0 million decrease compared to the same period in the previous fiscal year. The decline was primarily driven by:
- Less favorable market conditions, including increased U.S. refinery capacity utilization and shifts in global supply and demand.
- A decrease in propane margins, mostly attributable to hedging-related impacts, which negatively affected profitability.
Despite the financial downturn in this segment, CHS remains committed to optimizing its refining operations and adjusting its strategies in response to changing market conditions.
Ag Segment
The CHS Ag segment also faced significant challenges, reporting a pretax loss of $45.6 million, which reflects a $102.4 million decrease compared to the prior year period. Several key factors contributed to this downturn:
- Decreased margins for the grain and oilseed product categories, primarily due to timing impacts related to mark-to-market adjustments.
- A higher global supply of canola, soybean meal, and soybean oil, resulting in weaker oilseed crush margins compared to the previous fiscal year.
While these market dynamics presented obstacles, CHS continues to focus on supporting its cooperative members with critical inputs and services during the planting season. The company remains dedicated to strengthening its competitive position in the global agricultural market despite ongoing challenges.
Nitrogen Production Segment
CHS’s nitrogen production operations, which are a key part of its agribusiness, generated pretax earnings of $20.3 million, representing a $16.7 million decrease compared to the prior year period. This decline was primarily due to increased natural gas costs, which negatively affected profitability in nitrogen production.
Despite this decline, CF Nitrogen—one of CHS’s key equity method investments—remains a strong contributor to overall earnings, helping to offset some of the broader market pressures impacting the company’s agricultural operations.
Corporate and Other Earnings
The Corporate and Other segment reported pretax earnings of $24.0 million, reflecting a $16.3 million decrease from the prior year. The main reason for this decline was lower income from CHS’s equity investment in Ventura Foods. Ventura Foods, which produces oil-based food products, faced less favorable market conditions during the quarter, resulting in lower earnings contributions to CHS.
