Kernel crushing volumes rise 5.3% yoy in 1HFY21

Oilseed crushing volumes at Ukraine’s largest sunflower
oil producer and grain trader Kernel (KER PW, KERPW) rose 5.3% yoy to 1.66 mmt
in 1HFY21 (July-December 2020), according to its operational update published
on Jan 21. The company’s total edible oil sales swelled 11.4% yoy to 721 kt in
1HFY21. Kernel’s inland silos received 3.63 mmt of grains and oilseeds, or a
9.0% yoy decrease, while its export terminal throughput jumped 47.2% yoy to
4.25 mmt in 1HFY21. The company’s grain exports from Ukraine rose 16.4% yoy to
4.52 mmt in 1HFY21.

In 2QFY21, the company’s oilseed crushing volumes
climbed 5.3% yoy to 1.0 mmt (or a 51.1% qoq jump). Edible oil sales grew 22.8%
yoy to 722 kt, or 43.6% more qoq. Kernel’s inland silos received 2.4 mmt of
grains and oilseeds (16.8% more yoy and 89.6% higher qoq) and its terminal
throughput advanced 40.8% yoy to 2.4 mmt (or 27.5% higher qoq) in 2Q FY21. The
company’s grain exports rose 5.9% yoy to 2.4 mmt, or 12.7% higher qoq in
2QFY21.

Andriy Perederey: The
company’s oilseed processing volumes improved due to the launch of tolling
operations on third-party capacities in the Kharkiv region, while Kernel’s
oilseed crushing plants operated in full capacity. The company’s oil sales
jumped in 2QFY21 vs. 2QFY20 due to a low comparison base. The company boosted
its terminal throughput volumes due to phased starts of operations at a new
grain terminal in Chornomorsk.

And so, we expect that the company’s infrastructure
and trading segments will be key EBITDA sources in 1HFY20. Also, the oilseed
processing and sales segment will have a positive dynamic in FY2021 and will
support the company’s EBITDA in FY2021 due to supportive prices of vegetable
oils. So we estimate the company’s total EBITDA in the range of USD 430-440 mln
in 1HFY21.