As some have noted in comments giant ag cooperative CHS Inc. released their earnings for the year ending 8/31/2024 yesterday.
As I mentioned a time or two a few months ago I was expecting the company to have soft results–but in the case of CHS this means that while earnings are down a bunch year over year it doesn’t mean they are losing money.
Revenues were off around 10-15% on the year and net income fell from a giant sized $1.9 billion in 2023 down to $1.1 billion. The lower earnings isn’t exactly ‘chump change’ (my apologies to any chumps out there) and we should all know by now that earnings swing by quite a bit depending on the ag economy and more so the energy markets as they derive a huge percentage of earnings from their refinery operations–in fact pretax earnings in energy were down over $600 million for the year.
Their press release is here. Their 10K filing can be found here.
The company has 5 outstanding preferred issues – all of which sell for a premium for $25 liquidation.
CHSCL is still trading as I type this at $26.28 so obviously the BIG BOYS with the big money must not be too concerned. Considering that it is callable in JAN. of 2025 I find it somewhat amazing that its trading at $26.28. My guess is they won’t be calling it.
Chuck, I thought it was interesting in the earnings report when they said they are focused on returning profits to members and stock holders. If anything is called I could see them calling one closer to par like the CHSCM or CHSCN.
Par plus a quarterly dividend will not hurt the holders ( members) and would reduce amount of payout with all the preferred they have.
The quote was, “CHS intends to return $600 million in cash patronage and equity redemptions to our farmer-owners and member cooperatives in fiscal year 2025, as we continue to share profits with those that work with us to empower agriculture and help feed people around the globe,” said Jay Debertin, president and CEO.” By way of comparison, they said the same thing last year but the amount was $710 mil…… No calls came out of that allocation last year……
Thanks 2WR I just remember the mention of equity redemptions.
Thanks Tim…everyday I look out at my lp tank and thank CHS