CHS(US:CHSCO)2026-01-07 16:00Financial Performance - Revenues for the three months ended November 30, 2025, were $8,864,104 thousand, a decrease of $429,008 thousand or 4.6% compared to $9,294,112 thousand in 2024[135] - Gross profit for the same period was $389,352 thousand, representing 4.4% of revenues, slightly up from 4.3% in 2024[135] - Net income attributable to CHS Inc. was $260,483 thousand, an increase of $15,693 thousand or 6.4% from $244,790 thousand in 2024[135] - The Agronomy segment reported revenues of $1,238,005 thousand, a decrease of $26,029 thousand or 2.1% compared to $1,264,034 thousand in 2024[144] - The Grains segment experienced a revenue decline of $463,818 thousand or 8.2%, with revenues of $5,215,354 thousand compared to $5,679,172 thousand in 2024[140] - The Energy segment's revenues increased by $68,407 thousand or 3.0%, reaching $2,364,877 thousand compared to $2,296,470 thousand in 2024[138] Segment Performance - The Energy segment reported a total refinery throughput volume of 204,504 barrels per day for the three months ended November 30, 2025, compared to 198,108 barrels per day in the same period of 2024[126] - The average Group 3 2:1:1 crack spread increased to $26.61 per barrel in Q1 2026 from $16.88 per barrel in Q1 2025, contributing to higher income before income taxes (IBIT) for the Energy segment[128] - The Grains segment's profitability is significantly influenced by throughput and production volumes, with revenues affected by market-driven commodity prices and weather conditions[129] - The company anticipates continued headwinds in the Grains segment due to global trade factors and commodity market dynamics, impacting overall performance in fiscal 2026[124] - The Agronomy segment's income before income taxes increased by $8,697 thousand or 30.9%, totaling $36,804 thousand compared to $28,107 thousand in 2024[144] Cost and Expenses - Cost of goods sold decreased by $418,684 thousand or 4.7%, totaling $8,474,752 thousand compared to $8,893,436 thousand in 2024[147] - Interest expense rose to $37,351 thousand, an increase of $9,703 thousand or 35.1% compared to $27,648 thousand in 2024[152] - The company reported a decrease in marketing, general and administrative expenses to $262,850 thousand, a rise of 2.0% from $268,120 thousand in 2024[151] Market and Economic Factors - The company expects reduced margins for energy and agricultural commodities to persist throughout fiscal 2026 due to various macroeconomic factors[120] - The average price for D6 ethanol RINs increased by 51% to $0.9987 during the three months ended November 30, 2025, compared to the same period in the prior fiscal year[126] - The average price for D4 biodiesel RINs rose by 54% to $1.0190 during the same period, indicating increased costs associated with renewable fuel standards[126] Cash Flow and Capital Expenditures - Net cash used in operating activities increased by $43.8 million year-over-year to $337.8 million, primarily due to increased inventories[167] - Net cash used in investing activities rose by $241.2 million to $247.9 million, reflecting increased purchases of investments[168] - Cash provided by financing activities increased by $680.3 million to $644.2 million, driven by increased net cash inflows from notes payable[169] - Total capital expenditures for fiscal 2026 are expected to be approximately $575.1 million, down from $728.6 million in fiscal 2025, with $116.0 million spent on property, plant, and equipment in the first three months of fiscal 2026[161] Working Capital and Dividends - Working capital increased by $128.0 million to $2.9 billion as of November 30, 2025, primarily due to a $1.8 billion increase in current assets driven by higher inventories[163] - The company expects to pay approximately $168.7 million in preferred stock dividends during fiscal 2026, with $42.2 million paid in the first three months of fiscal 2026[161] - As of November 30, 2025, the company had approximately $2.3 billion of preferred stock outstanding, with various series having different dividend rates and payment frequencies[171] Other Income and Tax - Other income increased by $8.5 million, or 32.2%, to $34.9 million for the three months ended November 30, 2025, primarily due to unrealized gains on investments and increased interest income[153] - Equity income from investments rose by $31.2 million, or 25.5%, to $153.5 million, driven by higher equity income from CF Nitrogen due to increased urea and UAN prices and decreased natural gas costs[154][155] - Income tax expense decreased by $1.5 million, or 11.4%, to $11.7 million, with effective tax rates of 4.3% for the three months ended November 30, 2025, compared to 5.1% in the prior year[156] Risk and Market Exposure - No material changes in market risk exposures were experienced for the period ended November 30, 2025[178]