Kernel: Ukraine's Kernel sees $44.1mn net profit in Q2 FY2015

04.03.2015

Kernel, one of the largest Ukrainian agrarian groups, saw $44.135mn in net profit in Q2, FY2015 (July 2014-June 2015). According to a company statement, its revenue in October-December 2015 fell by 13.3% to $652.53mn, with lower international sunflower oil and grain prices driving the decline. Volume increased across all segments.

In July-December 2015, the company saw $66.44mn in net profit compared to a loss of $47.84mn during the same period last year, while revenue grew by 8.2% to $1.232bn. In October-December 2015, the company's EBITDA rose by 2.5 times in annual terms, to $142.3mn.

Kernel made $38.7mn from bottled sunflower oil sales (13% down on Q2 FY2014), $284.8mn from sales of oil in bulk (5% down), $312.6mn from sales of grain (35% down), $15.6mn from export terminals (7% up) and $24.9mn from silo services (51% down).

Net debt decreased 28% y/y to $735.2mn as of  December 31, 2014, versus $1,017.7mn as of December 31, 2013. This reflected strong cash flow generation during the last twelve months and the release of working capital caused by lower sunflower oil prices and year-over-year lower inventory levels.

In early October 2014, Fitch affirmed a CCC long-term foreign currency rating for Kernel Holding SA (Luxemburg), which incorporates Kernel Group's assets, a large operator on the Ukrainian market of grain and oilseed crops. The agency also affirmed Kernel Group's long-term local currency rating at CCC. The ratings mirror the political and economic uncertainty in Ukraine, where the company holds its main assets, which may ultimately threaten its financial flexibility and fulfillment of debt obligations, the statement noted.

Kernel Group incorporates the Poltava oil-extracting factory, the Prykolotne oil-extracting factory (Kharkiv Region), the Vovchansk oil-extracting factory (Kharkiv Region), grain elevators with a combined storage capacity of 2.2mn tonnes, and other agricultural enterprises that lease 84,500 hectares of land. Kernel Group's units produce goods under the trademarks Schedryi Dar, Stozhar, Liubonka, and Chumak.

 


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