CHS Inc. reported a significant decline in financial performance for the first quarter of fiscal 2025, ending November 30, 2024. The company generated revenues of $9.29 billion, a decrease of 18.4% from $11.39 billion in the same period last year. Gross profit also fell sharply to $400.68 million, down from $644.95 million, reflecting a gross margin of 4.3% compared to 5.7% in the prior year. Net income attributable to CHS Inc. was $244.79 million, a decline of 53% from $522.92 million in the previous year, resulting in a net income margin of 2.6%.
The decline in revenue and profitability was attributed to several factors, including lower selling prices across the company's agricultural and energy segments. The Energy segment's revenues decreased by 21.6% to $2.13 billion, primarily due to unfavorable global market conditions that impacted refining margins. The Ag segment also saw a 17.5% drop in revenues to $7.14 billion, driven by decreased selling prices for grain and oilseed products. Operating earnings for the quarter were $137.83 million, down from $392.89 million, reflecting the challenges faced in both segments.
In terms of operational developments, CHS Inc. reported an increase in inventories, which rose to $3.90 billion from $3.07 billion, driven by the fall harvest. The company also completed the acquisition of West Central Ag Services, a cooperative based in Ulen, Minnesota, which is expected to enhance its agronomy services. The total assets of CHS Inc. increased to $19.58 billion, up from $18.72 billion, while total liabilities rose to $8.76 billion from $8.13 billion, indicating a strategic focus on growth despite current market challenges.
Looking ahead, CHS Inc. anticipates continued volatility in global energy and agricultural commodity markets, influenced by macroeconomic factors such as geopolitical tensions and changing trade policies. The company expects that these conditions will exert further pressure on margins and profitability throughout fiscal 2025. Management remains focused on executing its strategic priorities, including investments in technology and supply chain improvements, to navigate the challenging environment and enhance value for its members.