Kernel boosts crushing volumes 12.3% yoy in 9MFY18

Ukraine’s largest sunflower oil producer and grain
trader Kernel (KER PW, KERPW) boosted its sunflower seed crushing volumes by
12.3% yoy to 2.3 mmt in 9MFY18, according to an operational update published on
Apr. 18. Bulk oil sales increased 14% yoy to 914.7 kt, while bottled oil sales
dropped 6.9% yoy to 85.8K liters in 9MFY18. The company’s grain sales plummeted
25.1% yoy to 3.1 mmt, mainly due to an 89.4% plunge to 105.7 kt of exports from
Russia. Export terminals throughput decreased 4.6% yoy to 4.45 mmt in 9MFY18.

In 3QFY18, the company’s sunflower seed crushing
volumes slightly decreased by 1.4% yoy to 848.9 kt, or almost flat qoq. Bulk
oil sales fell 14% yoy to 252.7 kt (or a 6.1% qoq decline) and bottled oil
sales dropped 24.4% yoy (and 3.1% qoq) to 26.2K liters. Bulk oil sales declined
due to accumulation of stocks of sunflower oil, the company said in its
operation update. Kernel’s grain sales fell 21.8% yoy (or a 7.9% qoq decline)
to 1.09 mmt and export terminal throughput decreased 6.1% yoy (or a 34.7% qoq
increase) to 1.51 mmt in 3QFY18.

Andriy Perederey: Kernel expects to boost
its bulk oil sales to about 360 kt in 4QFY18, implying total sales of bulk oil
will rise 18.2% yoy in FY2018. Also, the company’s other segments will create
pressure on its overall financial performance due to lower operational results
related to last season’s harvest decline. Based on the company’s operational
update, we estimate Kernel’s 3QFY18 EBITDA will be about USD 70 mln (a 12% yoy
decline) and full-year EBITDA will be in the range of USD 260-270 mln.