CHS : reports fiscal 2016 six-month earnings of $235.5...

ST. PAUL, Minn., April 11, 2016/PRNewswire/ -- CHS Inc. (NASDAQ: CHSCP, CHSCO, CHSCN, CHSCM, CHSCL), the nation's leading farmer-owned cooperative and a global energy, grains and foods company, today reported net income of $235.5 millionfor the first six months of its 2016 fiscal year.

CHS net income of $235.5 millionfor the period from Sept.1, 2015 through Feb. 29, 2016, reflected a 50 percent decline from net income of $471.5 millionfor the first six months of fiscal 2015. The lower earnings were attributed to the down economic cycles in the agricultural and energy sectors, which have resulted in reduced commodity prices and lower margins globally. These have combined to significantly reduce CHS profitability. Revenues through Feb. 29, 2016, were $14.4 billion, down nearly 20 percent from $17.9 billionfor first half of fiscal 2015, and primarily reflected lower selling prices for the energy, grain and fertilizer products the company handles.

'Like others in our energy and agricultural space, CHS is experiencing the earnings impact of depressed global prices and reduced demand for refined fuels, grain and fertilizer,' said CHS President and Chief Executive Officer Carl Casale. 'We've experienced these types of cycles throughout our more than 85-year history and will navigate this period by finding ways to run our businesses more efficiently and effectively while continuing to serve our owners' and customers' needs.'

For the second quarter of fiscal 2016 (Dec. 1, 2015through Feb. 29, 2016), CHS reported a net loss of $31.0 millioncompared with earnings of $92.8 millionfor the same period in fiscal 2015. Results for the quarter also were attributed to the current down cycle in the company's agricultural and energy businesses. Revenues for the second quarter of fiscal 2016 were $6.7 billion, down 20 percent compared with $8.4 billionfor the second quarter of fiscal 2015.

Through the first six months of fiscal 2016, operating income reflected lower pre-tax earnings in the CHS Energy and Ag segments. These were partially offset by increased earnings in the Corporate and Other category, as well as the addition of the company's new Nitrogen Production segment.

In addition to significantly reduced refining margins, CHS Energy segment earnings for the first six months of fiscal 2016 included a significant non-cash charge to revalue inventories to market value. The company's lubricants and transportation businesses also experienced lower earnings for the six-month period, while propane earnings increased.

Year-over-year earnings also declined within the CHS Ag segment, which includes the company's crop nutrients, renewable fuels, Country Operations retail, animal nutrition and sunflower processing; grain marketing, and processing and food ingredients businesses. Lower earnings in this segment were largely attributed to soft market conditions across the agricultural sectors CHS serves. Lower margins affected earnings within the crop nutrients, Country Operations retail and grain marketing businesses. In the renewable fuels business, earnings declined primarily due to lower market prices. CHS processing and food ingredients earnings decreased primarily due to a non-cash impairment charge on assets held for sale.

With one month of operation in fiscal 2016, CHS generated income before taxes in its newly established Nitrogen Production segment of $1.3 million, resulting from its February 2016equity method investment of $2.8 billionin CF Industries Nitrogen, LLC.

CHS reports results for its business services operations and its two food processing-related joint ventures under the Corporate and Other category. Corporate and Other earnings for the first six months of fiscal 2016 increased over the previous year primarily due to higher earnings associated with the company's investment in Ventura Foods, LLC, a manufacturer, packager and distributor of vegetable oil-based food products.

CHS Inc. (www.chsinc.com) is a leading global agribusiness owned by farmers, ranchers and cooperatives across the United States. Diversified in energy, grains and foods, CHS is committed to helping its customers, farmer-owners and other stakeholders grow their businesses through its domestic and global operations. CHS, a Fortune 100 company, supplies energy, crop nutrients, grain marketing services, animal feed, food and food ingredients, along with business solutions including insurance, financial and risk management services. The company operates petroleum refineries/pipelines and manufactures, markets and distributes Cenex brand refined fuels, lubricants, propane and renewable energy products.

This document and other CHS Inc. publicly available documents contain, and CHS officers and representatives may from time to time make, 'forward-looking statements' within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as 'anticipate,' 'intend,' 'plan,' 'goal,' 'seek,' 'believe,' 'project,' 'estimate,' 'expect,' 'strategy,' 'future,' 'likely,' 'may,' 'should,' 'will' and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on CHS current beliefs, expectations and assumptions regarding the future of its businesses, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of CHS control. CHS actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause CHS actual results and financial condition to differ materially from those indicated in the forward-looking statements are discussed or identified in CHS public filings made with the U.S. Securities and Exchange Commission, including in the 'Risk Factors' discussion in Item 1A of CHS Annual Report on Form 10-K for the fiscal year ended August 31, 2015. Any forward-looking statements made by CHS in this document are based only on information currently available to CHS and speak only as of the date on which the statement is made. CHS undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

CHS Inc. Earnings By segment (in millions $)
	For the Three Months Ended				For the Six Months Ended
	February 29,				February 29,
	2016		2015		2016		2015
Energy	$(63.1)		12.1		129.9		291.2
Ag	(31.1)		61.1		38.1		200.4
Nitrogen Production	1.3		--		1.3		--
Corporate and Other	16.4		17.3		44.1		34.5
Income (loss) before income taxes	(76.5)		90.5		213.4		526.1
Income tax (benefit) expense	(46.3)		(2.4)		(22.6)		54.9
Net income (loss)	(30.2)		92.9		236.0		471.2
Net income (loss) attributable to non-controlling interests	0.8		0.1		0.5		(0.3)
Net income attributable to CHS Inc.	$(31.0)		$92.8		$235.5		$471.5

SOURCE CHS Inc.

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