Kernel crushing volumes decrease 33% yoy in 4Q and 7% in FY2021

Ukraine’s largest sunflower oil producer and grain trader Kernel (KER PW, KERPW) reported that its oilseed crushing volumes dropped 32.6% yoy (and 31.5% qoq decrease) to 617 kt in 4QFY21, according to a trading update published on July 22. The company’s edible oil sales declined 44.1% yoy (and 26.6% qoq decrease) to 273 kt in 4QFY21. Its grain export slid 10.5% yoy (and 8.6% lower qoq) to 1.67 mmt, while the company’s export terminals’ throughput was 1.85 mmt (0.5% yoy higher and 10.0% qoq lower) in 4QFY21.

In FY2021, Kernel’s crushing volumes decreased 7.4% yoy to 3.18 mmt, lower than the 3.5 mmt of the company’s guidance for the period. The company’s edible oil sales declined 10.0% yoy to 1.37 mmt in FY2021. Its grain export volumes increased 1.4% yoy to 8.01 mmt in FY2021, lower than the company’s guidance of 9.5 mmt for the period. Its export terminal throughput jumped 22.4% yoy to 8.16 mmt in FY201.

Andriy Perederey: The company’s crushing volumes and edible oil sales were lower in 4QFY21 due to a weaker 2020 harvest of sunflower seed in Ukraine. So, the company’s crushing capacity utilization lowered to 87% in FY2021 vs. 99% a year ago. Also, a weaker grain harvest in 2021 resulted in a slowdown of the company's grain export volumes in 4QFY21. On the other hand, the company showed positive full-year trading results. We expect that the strong growth of the export terminals' throughput and solid grain export volumes will have a positive effect on the company's P&L in FY2021. So, we are keeping unchanged our estimate for FY2021 of total EBITDA in the range of USD 738-749 mln.