Kernel EBITDA falls 32% yoy, profit rises 2% yoy in 1QFY16

Обзоры по компаниям и отраслям 25.11.2015 Ukrainian grain trader and sunflower oil producer Kernel reported a 35% yoy decline in net revenue to USD 377.7 mln in 1Q of its 2016 fiscal year started in July. Its 1Q EBITDA decreased 32% yoy to USD 55.1 mln. The 39% yoy decline in financial costs (to USD 11.2 mln) and 73% yoy decline in foreign exchange losses (to USD 4.7 mln) allowed the company to post a bottom line of USD 23.9 mln, which is 2% higher yoy. In its core segment, bulk oil, revenue fell 27% yoy to USD 169.9 mln in 1Q on a 17% yoy decline in oilseed crushing, caused by smaller oilseed availability as of the end of the farming season. Nonetheless, the company said it is sticking to its previous forecast of about a 7% yoy increase in crushing volumes, to 2.7 mmt, in the current fiscal year. The segment’s EBITDA declined 45% yoy to USD 22.5 mln. Its EBITDA per ton of bulk oil decreased 29% yoy to USD 142, which the company attributed to a high comparison base. A year before, the margin was abnormally high. In its second-largest segment, grain trading, the company reported a 39% yoy decline in revenue to USD 176.3 mln, on a 24% yoy decrease in grain volume traded. The company commented that farmers decreased their selling activity on weak international prices and devaluation expectations for the local currency. The segment’s EBITDA decreased 41% yoy to USD 10.4 mln, meaning the EBITDA margin remained the same yoy (at 6%). Kernel’s best performing segment in 1Q was farming, whose revenue improved 2% yoy to USD 56.2 mln and EBITDA advanced 49% yoy to USD 16.0 mln. Most of the profit improvement was attributed to revaluation gains of agricultural produce, we estimate. The company’s total debt stood at USD 457 mln as of end-1Q FY2016, which is flat compared to the year’s start and 34% less yoy. Its net debt stood at USD 381 mln and Net debt/LTM EBITDA ratio was 1.0x as of end-1Q.