Business news from Ukraine

“Kernel” increased sunflower processing by 24%

23 January , 2024  

“Kernel, one of Ukraine’s largest agricultural holdings, processed 811 thsd tonnes of sunflower seeds in the second quarter of fiscal year (FY) 2024, up 24% year-on-year, when the company’s operations were disrupted by power outages due to Russia’s attacks on Ukraine’s energy infrastructure.

“Two out of eight plants of the agricultural holding, which are located in Kharkiv region near the border with Russia, remain unavailable for work,” the company said in a financial report on its website on Monday.

According to the report, sales of sunflower oil in the second quarter of FY2024 increased by 13% compared to the same period last year and exceeded 388 thousand tons. High volumes of sunflower seeds processing are supported by various export logistics options, including deep-water Ukrainian Black Sea ports. At the same time, sales of bottled sunflower oil accounted for 6% of total sales.

In the first half of FY2024, Kernel’s elevator volumes increased by 21% year-on-year to 2.5 mln tonnes as the agricultural holding managed to complete the harvesting campaign in its Agriculture division on time, unlike the postponed harvesting campaign a year earlier.

According to the agroholding, it managed to increase export transshipment volumes through its terminals by 11.2 times in October-December 2023, up to 1,805 thousand tons, using the temporary commercial shipping corridor created by the Ukrainian Navy. This volume includes transshipment of grain, sunflower oil and meal, as well as transshipment services provided to third parties (65 thousand tons in the second quarter of FY2024).

This figure, according to Kernel, is 5% higher than the same period last year and is explained by the success of the agricultural holding, which was achieved during FY2023 as part of the Black Sea Grain Initiative.

However, export terminals operated below pre-war levels as they suffered from damage caused by Russian missile strikes on Kernel’s port infrastructure in the summer of 2023.

Due to the resumption of transshipment volumes at the export terminal, the volume of grain exports from Ukraine in the second quarter of FY 2024 increased 8.4 times compared to the previous quarter, reaching 1.705 thousand tons, the agricultural holding stated.

As reported, before the war, Kernel was the world’s largest producer of sunflower oil (about 7% of world production) and its exports (about 12%). It is one of the largest producers and sellers of bottled oil in Ukraine. It is also engaged in the cultivation and sale of agricultural products.

In the first quarter of FY2024, the company posted a net loss of $30.9 million, while the previous year ended with a net profit of $162 million, with revenue down 17% to $564 million.