Kernel crushing volumes rise 7.5% yoy in 4Q, exceed FY19 guidance

Ukraine’s largest sunflower oil producer and grain
trader Kernel (KER PW, KERPW) reports that sunflower seed crushing volumes slid
by 1.3% qoq (rose 7.5% yoy) to 896.2 kt in 4QFY19, according to a trading
update published on July 17. Its bulk oil sales increased 15.8% qoq (and rose
7.0% yoy) to 414.0 kt in 4QFY19. Its grain sales increased 16.8% yoy (and
jumped 57.2% yoy) to 2.5 mmt. Export terminals’ throughput decreased 7.6% qoq
(a 19.4% decline yoy) to 1.3 mmt in 4QFY19.

Meanwhile, Kernel’s FY2019 sunflower seeds crushing
volumes rose 0.9% yoy to 3.16 mmt, slightly above the company’s guidance of 3.1
mmt. The company’s bulk oil sales increased 13.5% yoy to 1.5 mmt in FY2019. Its
grain trading volumes jumped 2.25x yoy to 10.4 mmt, while the company’s export
terminal’s throughput decreased 0.9% yoy to 6.0 mmt in FY2019.

Andriy Perederey: The
company’s operating results show strong growth in the grain trading segment,
while other segments were stable in FY2019. The small annual increase in
sunflower seeds crushing is explained by weak 1QFY19 results, when volumes
declined 23% yoy. We expect Kernel will generate USD 330-340 mln of EBITDA in
FY2019 (compared to USD 223 mln in FY2018).