Kernel, one of the largest Ukrainian agro-industrial groups, in the second quarter of fiscal 2023 (FY, Q2 – September-December 2022) decreased its sales of vegetable oils (sunflower and rapeseed) by 17% as compared to the same period of the previous FY – from 416,500 tons to 344,700 tons.
According to the report published on the company’s website, the total processing of oilseeds in the specified period decreased by 34%, from 985.4 thousand tons to 653.2 thousand tons.
The holding explained the decrease of production and sales volumes by the stoppage of three of its nine oil extraction plants (IEP) in Kharkiv region, caused by the military risks from the Russian Federation. In addition, the group’s production performance was affected by Russian rocket attacks on Ukrainian critical infrastructure, which led to power outages across the country, the report said.
“Due to regular power outages, Kernel had to temporarily suspend processing operations at two of its oilseed processing plants during November-December 2022, while the remaining four oil extraction plants (OEPs) operated relatively steadily thanks to cogeneration thermal power plants,” the holding explained in the report.
According to the report for the first half of FY 2023 (July – December 2022) Kernel sold 546.8 thousand tons of sunflower and rapeseed oil (-14% compared to the same period of 2022) and processed 1.11 million tons of oilseeds (-24%).
The Group halved the volume of crops supplied to its elevators in the second quarter of FY 2023 as compared to the second quarter of FY 2022 to 1.51 million tons. The company delivered 2.0 million tons of raw agricultural products to elevators in 6 months of FY 2023 – by similar 50% less than in 6 months of FY 2022.
“Kernel” also noted that because of the military aggression of the Russian Federation in Ukraine, 18 of its employees were killed and 61 employees were injured. A total of 1,333 employees of the group participated in the war, of which 532 were demobilized and returned to work.
“In December 2022, one of the group’s MEZs in the Kharkiv region came under missile fire from Russia. Due to its location in a high-risk area and constant shelling in the region, it is not possible at this time to properly assess and evaluate the damage to the facility. No other Kernel infrastructure was damaged during the reporting period,” the report states.
Kernel’s total exports of crops in the second quarter of FY 2023 decreased by 56% compared to the same period last fiscal year – to 1.52 million tons, and in the first half of the year – by 61%, to 2.25 million tons. Export was carried out mainly within the framework of Istanbul grain deal, while negligible volume of agricultural products was exported through alternative channels (railroad, river, automobile transport).
The holding said in a report that in December 2022 it successfully completed the acquisition of a 100% stake in the Pivdennyi oil transshipment terminal (Odessa region, Black Sea) for $19.8 mln.
“Kernel is the world’s largest producer and seller of bottled sunflower oil in Ukraine, accounting for 7% of world production and 12% of exports. In addition, the company was involved in other agricultural products cultivation and sales.
The largest co-owner of Kernel, through Namsen Ltd. is Ukrainian businessman Andrei Verevskyi, with a 39.3% stake.
In FY2022 (July-2021 – June-2022), the holding posted net loss of $41 mln against $506 mln net profit in the previous FY. Its revenue decreased by 5% – to $5.332 bln, while EBITDA decreased 3.7 times – to $220 mln.
