“Kernel, one of Ukraine’s largest agricultural holdings, processed 684 thousand tons of oilseeds in the first quarter of fiscal year 2024-2025 (July-September), up 12% year-on-year, a record high for the first quarter, according to the company’s annual report released on Monday evening.
“This growth was driven by the additional capacity of our new plant, which was commissioned in February 2024, and the earlier start of sunflower harvesting, which improved the availability of seeds in the reporting period. To maximize capacity utilization, Kernel processed oilseeds from third parties under tolling contracts, as well as rapeseed along with sunflower. Out of the total volume, 132 thousand tons were supplied under tolling contracts,” the report says.
According to the agroholding, in the first quarter of 2024-2025, it has already processed 589 thsd tonnes of sunflower seeds and 95 thsd tonnes of rapeseed.
At the same time, oilseed processing volumes decreased by 28% due to a one-month break for maintenance of processing plants in the summer and preparation for the new season.
“Taking into account the quarterly decline in oilseed processing volumes, Kernel reduced sales of edible oil by 30% in July-September 2024-2025 MY to 269 thousand tons, of which 18 thousand tons were bottled sunflower oil.
Kernel Agro Holding is the world’s largest exporter of sunflower oil, one of the largest producers and sellers of bottled oil in Ukraine. It is also engaged in the cultivation and sale of agricultural products.
Kernel’s net profit for FY2023 amounted to $299 million, while the company ended the previous year with a net loss of $41 million. The agricultural holding’s revenue for FY2023 decreased by 35% to $3.455 billion, but EBITDA increased 2.5 times to $544 million.
In the first nine months of FY2024, the agricultural holding reduced its net profit by 53% to $204 million, while revenue decreased by 4% to $2.595 billion, and its EBITDA decreased by 36% to $384 million.
The Antimonopoly Committee of Ukraine (AMCU) has fined a number of companies, including enterprises belonging to the Kernel and Continental Farmers Group agricultural holdings, for purchasing assets without obtaining the appropriate permit from the agency, the agency’s press service reports.
According to the report, Poltava-Zerno LLC, a part of Kernel, was fined UAH 170 thousand for violating the legislation on protection of economic competition under clause 12 of Article 50 of the Law “On Protection of Economic Competition” by acquiring assets consisting of movable and immovable property and forming a single property complex without obtaining the necessary permit from the AMCU.
For the same reason, a fine of UAH 3.3 million was imposed on Mriya Farming Karpaty LLC, which is founded by Continental Farmers Group.
In addition, JSC ProCredit Bank was fined UAH 3 million for acquiring assets in the form of a single property complex – movable and immovable property that can support activities in the field of agriculture, which were owned by IDEK-2006 LLC without obtaining the appropriate permit from the AMCU.
State-owned Oschadbank has increased the credit limit for Druzhba-Nova, the largest cluster of Kernel’s agricultural holding, by almost four times – from UAH 340 million to UAH 1.253 billion, the bank’s press service reports.
According to the report, the funds are provided to replenish the working capital of the agricultural producer. Thanks to the funds raised, the company will be able to ensure an effective harvesting and sowing campaign this year, which will lead to an increase in foreign exchange earnings from Ukrainian exports.
“Supporting the agricultural sector continues to be a priority for us during the war, as it is not only food security, but also one of the main drivers of our economy and foreign exchange earnings in Ukraine,” said Yuriy Katsiyon, Deputy Chairman of the Board of Oschadbank in charge of corporate business.
The bank clarified that the loan portfolio of the Kernel group of companies in Oschadbank is already over UAH 2.2 billion.
Druzhba-Nova is one of the largest land clusters of Kernel, which cultivates more than 110 thousand hectares in Sumy, Chernihiv and Poltava regions. It specializes in crop and livestock production.
Prior to the war, Kernel was the world’s largest producer of sunflower oil (approximately 7% of global production) and a major exporter (approximately 12%). It is one of the largest producers and sellers of bottled oil in Ukraine. In addition, it is engaged in the cultivation and sale of agricultural products.
Kernel’s net profit for FY2023 amounted to $299 million, while the company ended the previous year with a net loss of $41 million. The agricultural holding’s revenue for FY2023 decreased by 35% to $3.455 billion, but EBITDA increased 2.5 times to $544 million.
In the first half of FY2024, Kernel’s net profit fell 3.6 times compared to the first half of FY2023 to $102 million, and EBITDA halved to $223 million on a 16% decline in revenue to $1.59 billion.
According to the National Bank of Ukraine (NBU), as of May 1, 2024, Oschadbank ranked 2nd (UAH 403.61 billion) in terms of total assets among 63 banks in the country. Last year, the financial institution’s net profit amounted to UAH 5.98 billion.
Kernel Agro Holding, one of the largest agricultural companies in Ukraine, processed 3.2 million tons of oilseeds in the fourth quarter of the 2023-2024 fiscal year (FY, July-June) and returned to pre-war processing volumes, the company’s press service reported in a preliminary public report.
“This result was achieved thanks to the commissioning of a new oil extraction plant in western Ukraine,” the press service explained on its Facebook page.
According to the report, Kernel transshipped 6.7 million tons of agricultural products through its terminals, including 486 thousand tons for partners.
In fiscal year 2024, the agricultural holding offered its port facilities to Ukrainian farmers for the first time to help increase Ukraine’s agricultural exports. This area will continue to develop, Kernel promised.
“We exported 5.5 million tons of grain, which is 47% more than in the last financial year. This became possible due to stable exports via the Black Sea,” the agricultural holding summarized.
Prior to the war, Kernel was the world’s leading producer of sunflower oil (about 7% of global production) and its exports (about 12%). It is one of the largest producers and sellers of bottled oil in Ukraine. In addition, it is engaged in the cultivation and sale of agricultural products.
Kernel Agro Holding, one of the largest agricultural companies in Ukraine, processed 951 thousand tons of oilseeds, including 17 thousand tons of rapeseed, in the fourth quarter of fiscal year (FY) 2024, bringing the total processing volume to 3.2 million tons in FY 2024.
“This represents an increase of 27% year-on-year, primarily due to new crushing capacity added in February 2024 and the commissioning of a new oil extraction plant in Western Ukraine,” the company explained in a report to the Warsaw Stock Exchange on Monday.
According to the report, sales of sunflower oil in April-June 2024 increased by 1% quarter-on-quarter to 384 thousand tons, including 20 thousand tons of bottled sunflower oil.
The volume of silo acceptance in the fourth quarter of FY2024 was seasonally low and amounted to 53 thsd tonnes, bringing the total production in FY2024 to 2.8 mln tonnes, which is the same as in the same period last year, the agroholding said.
At the same time, the volume of grain exports from Ukraine in the last quarter of the financial year amounted to 1.61 mln tonnes, 46% of which were to foreign buyers. This is 14% less than in the previous quarter, but 2.6 times more than in the same period last year.
“For the whole of fiscal year 2024, Kernel exported 5.5 million tons of grain, up 47% year-on-year. Grain received from external suppliers accounted for 2.6 million tons of the total export volume. The agricultural holding attributed this growth to well-functioning export routes through the Black Sea for most of the year.
In April-June 2024, the transshipment volume of the group’s export terminals decreased by 8% compared to the previous quarter and amounted to 2.3 mln tons, indicating a slowdown in grain exports.
For the whole of FY2024, Kernel transshipped 6.7 mln tons of grain, sunflower oil and meal through its terminals, up 51% year-on-year. This growth was driven by the resumption of export routes through deep-water ports starting in the second quarter of FY2024. Grain accounted for 75% of the total transshipment volume in FY2024, edible oil for 12%, and meal produced from residues.
To improve terminal capacity utilization, the Group provided transshipment services to third parties in FY2024, totaling 486 thousand tons.
“Critically high temperatures and prolonged lack of precipitation in all regions of the group’s presence negatively affected the yield potential of spring crops in the fields, especially soybeans and, to a lesser extent, corn,” the agricultural holding summarized.
Before the war, Kernel Agro Holding was the world’s leading producer of sunflower oil (about 7% of global production) and its exports (about 12%). It is one of the largest producers and sellers of bottled oil in Ukraine. In addition, it is engaged in the cultivation and sale of agricultural products.
Kernel’s net profit for FY2023 amounted to $299 million, while the company ended the previous year with a net loss of $41 million. The agricultural holding’s revenue for FY2023 decreased by 35% to $3.455 billion, but EBITDA increased 2.5 times to $544 million.
In the first half of FY2024, Kernel’s net profit fell 3.6 times compared to the first half of FY2023, to $102 million, and EBITDA halved to $223 million, with revenue down 16% to $1.59 billion.
“Kernel, one of the largest Ukrainian agricultural holdings, processed 816 thsd tonnes of sunflower seeds in the third quarter of fiscal year 2024 (FY, July 2023-June 2024), up 10% year-on-year and in line with the previous quarter.
“At the end of February, the Group launched a start-up initiative at a new oilseeds crushing plant located in western Ukraine, which crushed 24 thousand tons during the reporting period. At the time of publication of this report, the plant is reaching full production capacity,” the company said in a report to the Warsaw Stock Exchange on Wednesday.
According to the agroholding, two of Kernel’s oilseed processing plants in Kharkiv region are out of operation due to their proximity to the Russian border and the war zone. The assets continue to be subject to regular attacks and suffer serious damage. One of these plants is currently in an emergency condition due to its location in the epicenter of hostilities. Both assets were fully impaired in 2022.
At the same time, sales of sunflower oil in January-March 2024 increased by 40% compared to the same period in 2023 and reached 382 thousand tons, totaling 1,090 thousand tons in the first nine months of FY2024, up 33% year-on-year.
Sales of bottled sunflower oil accounted for 5% of total sales (19 thsd tonnes) in the third quarter of FY2024.
Although the profitability of sales was relatively stable in the third quarter of FY2024, compared to the previous quarter, EBITDA per tonne of oil sold decreased by 36% to $131, as the profit for the previous quarter was exceeded by a one-time insurance payment caused by material damage and business interruption.
As a result, EBITDA of the Sunflower Oil segment decreased by 34% to $50 million in the third quarter of fiscal year 2024 for the nine months ended March 31, 2024.
The Oilseeds Processing segment generated $184 million in EBITDA for the agricultural holding, down 16% year-on-year.
“As of March 31, 2024, Kernel had a relatively good supply of sunflower seeds: 511 thousand tons of seeds were in stock. Together with further purchases in April-May 2024, this will ensure that the agricultural holding’s plants will be operational until mid-summer, with a further switch to rapeseed processing at some plants, which was already practiced a year earlier.
“Following the progress of the processing season, we have revised our estimates of the sunflower harvest for 2023 and are increasing the harvest of seeds in Ukraine from 14 to 14.5 million tons,” Kernel said.
At the same time, since April 2024, the group’s enterprises have been experiencing problems with electricity supply caused by Russia’s attacks on Ukraine’s generating and distribution infrastructure. This has led to increased downtime and reduced productivity, although the impact is still manageable, the agricultural holding explained.
“Kernel also said that in June-July 2024, it plans to commission a sixth cogeneration thermal power plant with an installed electric capacity of 22.5 MW as a generating capacity at its recently launched oilseed processing plant in western Ukraine.
“This renewable energy capacity is of great importance, especially given the plant’s planned capacity and the upcoming power outages in Ukraine in the fall and winter of 2024,” Kernel emphasized.
