Kernel guides minor bottom line growth in FY13, plans dividends

Kernel (KER PW) released its audited financial results for the year ended June 30, 2012. Revenue in FY12 amounted to USD 2,157 mln (+14% yoy, 1% below preliminary reported numbers), EBITDA reached USD 322 mln (+4% yoy, nearly in line with the preliminary number), and net income was USD 207 mln (-8% yoy, 4% higher than the preliminary figure). In a statement, the  company’s chairman said Kernel plans a small increase in financials in FY13: USD 2,400 mln in revenue (+11% yoy), EBITDA at USD 350 mln (+9% yoy) and bottom line of USD 215 mln (+4% yoy), and promised the board would work out a dividend policy this year.

Alexander  Paraschiy: The company’s guidance for next year looks rather conservative – the forecasts are smaller than those the company had a year ago for FY12 (EBITDA of 370 mln and net income of USD 255 mln). We believe the plans have a high chance being outperformed. The key challenge Kernel might face in the current season is the possible renewal of grain export limitations, while the company’s diversification into Russia last season makes it less sensitive to this challenge. As the company is very unlikely to demonstrate the same high non-organic growth observed over the last couple of years, its initiative to start paying dividends should be welcomed by the market.