Kernel EBITDA falls in 3Q FY12 on trading margin decline

Kernel (KER PW) reported its 3Q FY12 financials for the three months ended March 31, 2012 yesterday after market close. Revenues increased 16% yoy to USD 599 mln, EBITDA declined 31% yoy to USD 62.5 mln and net profit fell 52% yoy to USD 37.2 mln. The biggest disappointment for the company was its grain trading segment, where the operating margin decreased to a mere 3% vs. 10% a year earlier – the company cited the higher risk appetite of international exporters that depressed sector-wide grain trading margins and did not allow Kernel to maintain high profitability without taking price risk positions. The company also decreased its bulk oil segment operating margin to 13% in 3Q FY12 from 19% a year earlier, mostly explained by an abnormally high base last year. At the same time, the company decreased its EBITDA guidance for FY2012 (ending in June 2012) to USD 330 mln from USD 370 mln previously, net income guidance to USD 215 mln from USD 255 mln previously, and kept revenue guidance flat at USD 2,300 mln. We put our FY2012 estimates under review. The company will hold a conference call on Thursday at 15:00 CET.