Kernel boosts crushing by nearly a third, bulk oil sales grow 7% yoy in 2QFY16
20 January 2016
Ukraine’s largest sunflower oil producer Kernel (KER PW) reported on Jan. 20 it boosted its oilseed crushing by 31% yoy to 915 kt in 2QFY16 (October-December 2015). The company attributed such steep growth to utilizing third-party capacities, according to a tolling agreement the company announced in early September. Despite a jump in crushing, bulk oil sales grew only 7% yoy to 297 kt in the same period. Bottled oil sales slid 9% yoy to 31 kt in 2QFY16.
Kernel’s grain sales declined 6% yoy to 1,323 kt as the slow pace of farmer selling in Ukraine was partially offset by strong exports from Russia, the company said. Export terminal throughput advanced 18% yoy to 1.7 mmt during the period, following debottlenecking at its Ukrainian port facility.
Roman Topolyuk: Kernel reported a set of strong operating results for the period. We believe crushing exceeding bulk oil sales has resulted in a working capital increase via growing inventories, which is normal for the oilseed business in the midst of a marketing year. But the company bears the risk of further decreasing prices in its unsold stocks (of around 70 kt, we estimate). The sunflower oil price decreased to USD 785/t in mid-January from USD 808/t average price for October-December 2015.
