Kernel reports on 4QFY13 operations, preannounces DPS of USD 0.25

Обзоры по компаниям и отраслям 19.07.2013 Integrated grain and sunflower oil company Kernel (KER PW) reported its 4QFY13 operating update (ending in June) the evening of July 18. Kernel increased grain sales 2.9x yoy (21% qoq) to 791 kt, bulk oil sales increased 8% yoy (78% qoq) to 290 kt and export terminal throughput rose 1.9x yoy (flat qoq) to 620 kt, according to the quarterly report. Its volume of sunflower oil crushing declined 1.6x qoq and 1.7x yoy to 417 kt in 4QFY13. The fourth quarter numbers imply the following full-year 2013 operating results: 3.04 mmt of grain sales (+43% yoy and 40% above the company’s guidance), 1.04 mmt of bulk oil sales (+25%), 3.2 mmt of grain export throughput (+79% yoy) and 2.3 mmt of sunflower seed crushing (-7% yoy, 10% below the guidance). The company also provided some average commodity prices for the fourth quarter: sunflower oil at USD 1127/t (-3% qoq), wheat at USD 305/t (-11% qoq) and corn at USD 275/t (-6% qoq). In a separate note, Kernel reported that its board approved a dividend policy of paying a stable USD 0.25 DPS annually (subject to AGM approval), which corresponds to a dividend yield of 1.5%, based on yesterday’s close. Alexander Paraschiy: Based on the provided operating data, we estimate that Kernel will report FY2013 revenue of about USD 2,950 mln (higher than its last guided number of USD 2,800 mln and 36% higher yoy), EBITDA of about USD 290 mln (below the last guidance of USD 310 mln and 10% lower yoy) and net profit close to USD 120 mln, if gains from acquisitions/disposals of assets are not counted (down 40% yoy). All in all, we do not view the results as encouraging. On the other hand, we expect the company will improve its P&L in the next season on higher farming operations and better oil sales volumes, as well as an expected tamer approach to grain stocks accumulation, which in turn will reduce financial expenses.