The Turkish vessel Polarnet, which left the port of Chornomorsk (Odessa region) on August 5 with 12,000 tons of corn from the Kernel agricultural holding, arrived at the Turkish port of Derince on August 8.
Kernel completed one of the most important missions – the first ship with Ukrainian grain arrived at its destination. The shipment was carried out as part of the initiative for the safe transportation of grain and food from Ukrainian ports,” the group of companies wrote on Facebook on Tuesday.
It is specified that the ship was loaded with corn at the Transbulkterminal grain terminal in Chornomorsk, which is part of Kernel. In the 2020/2021 marketing year (MY, July-June), the terminal handled 7.6 million tons of grain crops, which is 22% more than in MY 2019/2020, and became the largest in the country in terms of transshipment of agricultural products.
Agropromholding emphasized that Ukrainian agricultural exporters remain key suppliers of foreign exchange earnings to Ukraine, which is an important positive factor for the economy of the warring country.
“If we manage to maintain the trend and increase exports, farmers will not have to reduce the area under crops, and Ukraine will feel a deficit in state budget revenues,” Kernel summed up in the message.
Before the war, Kernel ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was also the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agricultural products and their sale.
Its largest co-owner through Namsen Ltd. is Ukrainian businessman Andrey Verevsky with a share of 41.3%.
The agricultural holding in fiscal year 2021 (FY, July 2020 – June 2021), increased its net profit by 4.3 times compared to FY 2020 – up to $513 million, its EBITDA increased 2.1 times – up to $929 million, revenue – by 38%, to $5.65 billion.
Kernel, one of the largest Ukrainian agro-industrial groups, in the 2022 financial year (FY, July 2021-June 2022) reduced sales of vegetable oil (sunflower and rapeseeds) by 29% compared to FY 2021 – to 967,000 tonnes from 1.37 million tonnes, the total processing of oilseeds – by 31%, to 2.19 million tonnes from 3.18 million tonnes.
According to a report published on the company’s website, the decline in production and sales of oilseeds and vegetable oil was caused by the blockade of Ukrainian seaports by warships of the aggressor country of the Russian Federation, as a result of which the active harvesting, processing and export of grain and sunflower oil was stopped.
It is specified that in the fourth quarter of FY2022 (March 2022-June 2022), Kernel sold 60,800 tonnes of sunflower and rapeseeds oil (less by 78% compared from the fourth quarter of FY2021) and processed 156,600 tonnes of oilseeds crops.
The total export of agricultural crops by Kernel in the fourth quarter of FY2022 decreased by 93% compared to the same period of the last fiscal year, to 123,000 tonnes, while in FY2022 the reduction was 1% – to 7.97 million tonnes.
In total, in the fourth quarter of FY2022, the group of companies increased the volume of agricultural products delivered to its elevators by 12% compared to the fourth quarter of FY2021, to 65,500 tonnes, while for the entire FY2022, some 4.19 million tonnes of agricultural raw materials were delivered to elevators – 10% more than in FY2021.
“The situation with the group’s critical infrastructure remains unchanged. The group’s two oil extraction plants in Kharkiv region, located in the temporarily occupied territories, remain inaccessible. The new granaries were not damaged, except for two silos with a capacity of 74,000 tonnes, which were badly damaged in the spring of 2022,” the group said.
“Since the beginning of the war with Russia, 1,150 of our employees have been mobilized into the Armed Forces of Ukraine or joined the defense units. Of these, 460 were demobilized and returned to work,” the agricultural holding stated.
Kernel also noted with regret that 11 of its employees were killed in Ukraine due to the military aggression of the Russian Federation.
The Kernel agro-industrial group plans to supply Ukraine with oil products, fertilizers and other inventory items in order to overcome the shortage of resources for agricultural production in Ukraine, Ihor Stelmaschuk, head of the Kernel commercial department, said at the Fuel for Ukraine international conference.
“Together with partners, we will be able to establish long-term systematic work in the processes of production and supply of fertilizers. And in the future we will build a powerful diversified mechanism for providing Ukraine with oil products, we will meet the fuel needs of agricultural enterprises in a planned and cyclical way,” Stelmaschuk said on the Facebook page of the agrarian group.
According to him, now Kernel is exchanging experience and ideas with key players in the global oil products market.
“We decided on the urgent problems of a resource, logistics and infrastructure nature. We assessed the risks and trends in the fuel market. The country’s future annual demand for diesel fuel is estimated at 4 million tonnes, so Ukrainian consumers need to establish cooperation with Europe right now,” Stelmaschuk stressed.
According to him, due to the full-scale Russian invasion, Ukraine is forced to replace 100% of the pre-war sources of supplies of oil products, which is what Kernel plans to do.
In addition, the agricultural holding is working on projects to provide the agricultural sector with mineral fertilizers, their logistics and transshipment in ports. Kernel stated that it has already signed the first contracts for the supply of fertilizers for the sowing of winter wheat and rapeseed in the autumn, which is especially important given the likely global shortage of fertilizers in autumn 2022 and spring 2023.
Before the war, Kernel ranked first in the world in production of sunflower oil (about 7% of world production) and its export (about 12%), and was also the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the holding was engaged in the cultivation and trade of other agricultural products.
The agro-industrial group Kernel, due to the blockade of Ukrainian seaports by Russian warships, reduced the rate of export of agricultural products by 90% compared to the pre-war period, from 7.5 million tonnes per year to approximately 750,000 tonnes per year, the group said, citing its CEO Yevhen Osypov.
“Today, Kernel’s export performance has reached only 10% of pre-war results, despite the fact that we export more than 7.5 million tonnes of the products annually. We, like colleagues from other companies, are constantly working on alternative channels for the sale and delivery of products,” his words are quoted in a message from Kernel on the group’s Facebook page on Monday.
According to Osypov’s forecasts, the war unleashed by the Russian Federation could lead to a 40% reduction in sunflower oil exports. Taking into account its exports in the 2020/2021 marketing year (MY, September-August) at the level of 5.13 million tonnes, in the current MY 2021/2022, supplies to foreign markets may be reduced to 3.1 million tonsne.
“The war can become a humanitarian catastrophe for the whole world, but we are doing everything possible to ensure food security,” Kernel’s CEO stated.
As reported, before the Russian military invasion, Ukraine monthly exported up to 5 million tonnes of agricultural products through the ports of Odesa and Mykolaiv, however, due to the blockade of these ports by the aggressor country, Russia, Ukraine can transport no more than 500,000 tonnes of grain monthly, which leads to a monthly shortage of $1.5 billion in export earnings.
Kernel, one of the largest Ukrainian agro-industrial groups, in the third quarter of the 2022 financial year (FY, January-March 2022), reduced sales of vegetable oil (sunflower and rapeseed) by 28% compared to the same period of the last FY – from 371, 9 thousand tons to 269.1 thousand tons, the total processing of oilseeds – by 38%, from 901.6 thousand tons to 562.8 thousand tons.
According to a report published on the company’s website on Friday night, the decline in production and sales of oilseeds and vegetable oil was caused by the blockade of Ukrainian seaports by warships of the aggressor country of the Russian Federation, as a result of which the active harvesting, processing and export of grain and sunflower oil was stopped.
Similarly, in the nine months of FY2022 (July-2021 – March-2022), Kernel sold 906.3 thousand tons of sunflower and rapeseed oil (-17% compared to 9 months of FY2021) and processed 2.0 million tons of oilseeds ( -21%).
In the third quarter of FY2022, the group of companies reduced the volume of agricultural products supplied to its elevators by 53% compared to the third quarter of FY2021 – to 50.9 thousand tons, while in 9 months. 4.1 million tons of agricultural raw materials were delivered to elevators in FY 2022, which is 10% more than in 9 months. FY2021.
Kernel also noted with regret that due to the unprovoked military aggression of the Russian Federation in Ukraine, five of its employees were killed.
“Since the beginning of the war with Russia, more than 1,100 of our employees have been mobilized into the Armed Forces of Ukraine or joined the terrorist defense units. Of these, 180 have been demobilized and returned to work. No significant damage has been caused to any of the most important objects or infrastructure of the group. Two oil extraction plants of the group are located in the temporarily occupied territory, and access to such facilities is limited,” the agricultural holding stated the results of the Russian military invasion.
The total export of agricultural crops by Kernel in the third quarter of FY2022 increased by 17% compared to the same period of the last fiscal year, to 2.1 million tons, while exports were carried out mainly in January and February and were almost completely absent in March. Over the reporting period, 77% of export deliveries were received from external suppliers, and the rest of the agricultural crop was grown by the Kernel agricultural holding.
Agropromgroup also clarified that in the third quarter of FY2022, the share of its exports in the total volume of grain crops exported from Ukraine amounted to 17%, and for 9 months of FY2022 – 24%.
According to Kernel, in the third quarter of FY2022, it transshipped 2.08 million tons (+1% compared to the same period in FY2021) of agricultural products through its own grain terminal Transbulkterminal (Chernomorsk, Odessa region) – and in nine months of FY2021 – 7.27 million tons (+15%). It is noted that in the third quarter of FY2022, the grain terminal worked exclusively in January and February, before the start of the war unleashed by Russia on February 24.
“The group is working on creating alternative export routes. Rail logistics to the EU countries is very difficult, with numerous bottlenecks that make it impossible to achieve any significant export volumes until supplies are resumed through the Ukrainian Black Sea ports,” – summed up the agrarian group in the message. Before the war, Kernel ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was also the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agricultural products and their sale.
The largest co-owner of Kernel through Namsen Ltd. is Ukrainian businessman Andrey Verevsky with a share of 39.28%.
The agricultural holding in the financial year 2021 (FY, July 2020 – June 2021), increased its net profit by 4.3 times compared to FY 2020 – up to $513 million, its EBITDA increased 2.1 times – up to $929 million, revenue – by 38%, to $5.65 billion.
Kernel, one of the largest Ukrainian agrarian groups, will begin paying dividends for FY2021 (July – June) from February 15, payments will be $0.44 per share, which is $0.02 per share more than in FY2020.
According to the company’s statement on the Warsaw Stock Exchange on Tuesday evening, the decision on the payment of dividends and their amount was made by the shareholders at the general meeting held on December 10, 2021, while on January 4, its board of directors determined the payment date.
In total, $36.97 million will be allocated for the payment of dividends.
Kernel’s current share price is PLN 57.1 (2.7% less) over the week, while over the year it increased by 15.7% from PLN 49.35.
As reported, the agricultural holding paid $35.3 million in dividends for FY2020 on January 14, 2021 at the rate of $0.42 per share.
On April 30, 2020, the group of companies paid out $20.5 million in dividends for FY2019 in the amount of $0.25 per share, similar to FY2018.
Kernel is a manufacturer and exporter of sunflower oil, operating in the production, export and domestic sales of sunflower oil, crop production, export of grain crops, provision of services for storage and transshipment of grain at elevators and port terminals.
