CHS Reports First Quarter Earnings

CHS Inc., the nation's leading agribusiness cooperative, today released results for its first quarter ended Nov. 30, 2022. The company reported quarterly net income of $782.6 million compared to $452.0 million in the first quarter of fiscal year 2022.

Fiscal 2023 first quarter highlights include:

• Revenues of $12.8 billion compared to $10.9 billion in the first quarter of fiscal year 2022, a year-over-year increase of 17%.
• Continued robust global demand for commodities, coupled with market volatility, resulted in strong earnings across all business segments.
• Significantly improved earnings in our Energy segment resulted primarily from higher refining margins driven by strong demand in rural America and global market conditions.
• Our soybean and canola processing businesses in our Ag segment benefited from strong demand for meal and oil.
• Our CF Nitrogen investment delivered strong earnings due to robust urea and UAN demand.

"The U.S. agricultural industry has benefited from ongoing strong global demand for grain and oilseed commodities," said Jay Debertin, president and CEO of CHS Inc.

"Our continued strong earnings are attributable to market dynamics and supported by our investments on behalf of our owners in infrastructure, supply chain capabilities and innovative technology that drive efficiency and operational improvements. As we enter 2023, CHS remains well-positioned to maximize value for our member cooperatives, farmer-owners and customers."

Energy Pretax earnings of $396.6 million for the first quarter of fiscal year 2023 represent a $327.4 million increase versus the prior year period and reflect:

• Improved refined fuels market conditions including higher refining margins and discounts on heavy Canadian crude oil, partially offset by higher renewable energy credit costs and increased refinery maintenance expenses
• Higher refined fuels and propane volumes driven by strong demand due to more favorable weather conditions during fall harvest compared to the same period in fiscal year 2022
• Lower propane margins resulting from hedging-related impacts due to volatile pricing in the first quarter

Ag Pretax earnings of $287.3 million represent a $0.9 million increase versus the prior year period and reflect:

• Strong global demand and constrained supply for grain and oilseed
• Improved margins in our oilseed processing business due to robust demand as well as mark-to-market gains
• Lower margins on our grain and oilseed commodities, driven by unfavorable mark-to-market impacts, as well as less favorable pricing for our agronomy products
• Decreased volumes across most of our Ag segment due to numerous factors, including drought conditions in portions of our trade territory

Nitrogen Production Pretax earnings of $96.9 million represent a $0.3 million increase versus the prior year period and reflect continued favorable performance of our strategic investment in CF Nitrogen due to strong global demand for urea and UAN.

Corporate and Other Pretax earnings of $36.7 million represent a $22.2 million increase versus the prior year period and reflect increased equity income from our Ventura Foods joint venture, which resulted from more favorable market conditions for edible oils.