The liquidation commission has sold the property of Ilyichevsk Oil and Fats Plant LLC (Chernomorsk, Odessa Region) for UAH 696.66 million to Poltava-Zerno LLC, 95% of which belongs to the Kernel agricultural holding.
According to information in Prozorro.Sale, the auction was held on July 26 with a starting price of UAH 689.6 million, and Poltava-Zerno was the only participant.
It is specified that the buyer has already paid UAH 55.04 million of the guarantee fee, part of which in the amount of UAH 13.93 million went to the remuneration of the operator of the electronic platform – LLC “Onylan-Market”.
The new owner received, in particular, a land plot of 8.58 hectares with communications, where the plant is located, a complex of buildings and structures, as well as transport, tanks, reservoirs, production lines, minibus and other property.
Ilyichevsk Oil and Fats Plant LLC is bankrupt. According to open data opendatabot.ua, as of 2020 its assets were estimated at UAH 205.324 million, profit – UAH 481.721 million, income – UAH 22.836 million. At the same time, debt obligations reached UAH 2.587 billion.
Agroholding “Kernel” before the war ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%). The company is one of the largest producers and sellers of bottled oil in Ukraine. In addition, the agroholding is engaged in the cultivation of agricultural products and their realization.
The largest co-owner of Kernel through Namsen Ltd. – is Ukrainian businessman Andriy Verevsky, who this year, as part of the buyout and delisting of the company from the Warsaw Stock Exchange, increased his stake from 41.3% to 74.05%.
Kernel’s net profit for the first nine months of 2023FY (January-March 2023) rose 36% to $437 mln, while revenue fell 45% to $2.715 bln.
As reported, Kernel recently reported that 40% of its grain storage and transshipment capacity at the Chernomorsk port was damaged as a result of a missile attack by Russia on the night of July 19, and it will take at least 12 months to restore these assets. In addition to the damage to infrastructure during this attack, a fire at the Chernomorsk port partially destroyed and damaged 60,000 tons of grain prepared for loading onto the large-capacity vessel Alexis and which was to be shipped to China.
Prices for oil benchmark grades are falling on Monday after they finished “in the plus” for the fifth week in a row and reached the highest levels since mid-April.
The price of WTI crude oil futures for September at the electronic trading of the New York Mercantile Exchange (NYMEX) as of 8:16 a.m. Q2 is down $0.36 (0.45%) to $80.22 per barrel. At the end of the previous session they rose by $0.49 – to $80.58 per barrel.
Quotes of September futures for Brent crude oil on the London exchange ICE Futures is $84.4 per barrel, which is $0.59 (0.7%) below the closing price of the last session. On Friday, these contracts rose by $0.75 (by 0.9%) – to $84.99 per barrel.
Over the past week, quotes of Brent increased by 4.8%, WTI – by 4.6%, according to MarketWatch.
Since the beginning of July, the price of Brent has jumped by 12%, WTI – by 14%, which is the best monthly increase since January 2022, amid production cuts by Saudi Arabia and Russia, notes Trading Economics.
Analysts at ANZ Bank believe that strong macroeconomic data, including US GDP growth, will support oil prices in the near term.
Oil prices are falling on Wednesday after climbing the previous day to highs since mid-April.
The market’s decline on Wednesday is supported by data from the American Petroleum Institute (API), which showed an increase in U.S. inventories last week. Reserves rose by 1.319 million barrels after declining by 797,000 barrels a week earlier, API said.
The cost of September Brent crude futures on the London-based ICE Futures exchange at 8:05 a.m. Wednesday stands at $83.19 per barrel, down $0.45 (0.54%) from the previous session’s closing price. On Tuesday, these contracts rose $0.9 (1.1%) to $83.64 per barrel, the highest since April 18.
The price of WTI crude oil futures for September at the electronic trading of the New York Mercantile Exchange (NYMEX) fell by $0.46 (0.58%) to $79.17 per barrel. At the end of previous trading, the cost of these contracts rose by $0.89 (1.1%), to $79.63 per barrel, which is also the highest value since April 18.
Official data on energy reserves in the U.S. for the week ending July 21, will be released by the Department of Energy at 17:30 Q. Experts surveyed by S & P Global Commodity Insights, on average, predict a decline in oil reserves by 4.4 million barrels, gasoline – by 2 million barrels, distillates – by 2.3 million barrels.
On the eve it became known that the Chinese authorities intend to stimulate consumption, including the purchase of cars and electronics, as well as demand for services, including sports, tourism and recreation.
“The situation in China is very important for the global growth in oil demand this year, and traders had concerns about the weaker-than-expected recovery of the country’s economy, – said in a review of ING, quoted by Market Watch. – Signals of new stimulus help to reduce these concerns”.
Benchmark crude oil prices are moderately higher on Tuesday morning due to ongoing concerns over fuel shortages in the global market.
The price of September Brent futures on London’s ICE Futures exchange is at $82.95 a barrel by 8:05 a.m. Q2, up 21 cents (0.25%) from the previous session’s close. On Monday, these contracts rose in price by $1.67 (2.2%) – to $82.74 per barrel, ending trading at the maximum mark since April 19.
Quotes of futures for WTI crude oil for September at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time rose by 24 cents (0.3%) and amounted to $78.98 per barrel. They rose $1.67 (2.2%) to $78.74 a barrel at the end of the previous session, hitting their highest since April 24.
“The unquenchable thirst for summer oil created a snowball effect that led to a multi-week rally,” said Manish Raj, managing director of Velandera Energy Partners. – Supply cuts from Saudi Arabia and Russia have led to increased demand for U.S. WTI crude from Asian buyers.”
According to him, the current situation was influenced by several factors, including growing demand in the U.S. during the summer, strong economic recovery in China and positive outlook for demand in India, where supply remains tight.
Record high demand in the near term will lead to a significant shortage of oil in the market and increase prices for the Brent grade to $86 per barrel by the end of the year, analysts at Goldman Sachs Group believe.
Meanwhile, data from oilfield services company Baker Hughes showed that last week the number of active drilling rigs in the U.S. decreased by 7 units to 530.
Oil prices are falling on Monday after a strong rise at the end of last week.
The cost of September futures for Brent on the London-based ICE Futures exchange at 8:15 a.m. on Monday is $80.95 per barrel, down $0.12 (0.15%) from the previous session’s closing price. On Friday, these contracts rose $1.43 (1.8%) to $81.07 per barrel.
The price of WTI oil futures for September at the electronic trading of the New York Mercantile Exchange (NYMEX) fell by $0.14 (0.18%) to $76.93 per barrel. At the end of previous trading, the cost of these contracts rose by $1.42 (1.9%), to $77.07 per barrel.
At the end of last week Brent rose by 1.5%, the cost of WTI rose by 2.3%, to the maximum since April 25.
Traders’ attention this week is focused on the Federal Reserve (Fed) meeting, which is expected to raise the rate by another 25 basis points. Continued tightening of monetary policy by the U.S. central bank raises the likelihood of a downturn in the economy and, consequently, lower demand for oil.
“Expectations of a new rate hike by the Fed are putting some pressure on the oil market, however, I believe that this event is largely already priced in,” notes Warren Patterson, who is responsible for commodities strategy at ING Groep NV.
The market is supported by expectations of lower supply amid Saudi Arabia’s production cuts.
The head of the International Energy Agency Fatih Birol said on Bloomberg TV at the weekend that due to production cuts by a number of countries, the oil market may face a deficit in the second half of the year even though there is no significant growth in demand in China.
Kernel Agroholding, one of the largest in Ukraine, processed 650.4 thousand tons of sunflower seeds in the fourth quarter of fiscal year 2023 (April-June), a 4-fold increase compared to the same period last FY.
According to the company’s report, processing was down 13% quarter-on-quarter, reflecting the usual sunflower seed shortage near the end of the season, which forced three of the group’s six operating plants to temporarily stop processing oilseeds in May-June.
“Two processing plants owned by the Group remain inaccessible in the high-risk area of the Kharkiv region with regular shelling by Russian occupiers,” the report states.
Overall, in 2023 FG processing grew by 15% to 2.51 million tons.
According to the report, vegetable oil sales in April-June 2023 increased by 14% quarter-on-quarter to 312,700 tons, including 21,000 tons of bottled sunflower oil, and the growth was fivefold compared to the fourth quarter of last year.
“The group continues to prioritize vegetable oil and meal exports over grain exports, given the more attractive margins in the oilseed processing value chain compared to grain export operations,” it said.
For the entire 2023 FY, sales reached 1 million 132.7 thousand tons, exceeding the previous FY by 17%.
It is pointed out that Kernel’s silo loadings in the fourth quarter of FY 2023 were seasonally insignificant at 98,000 tons, 50% higher than the fourth quarter of last year. As a result, total intake during FY 2023 was 2.83 million tons, down 32% from FY 2022.
According to the report, the transshipment volume of export terminals in Ukraine in April-June 2023 decreased by 13% quarter-on-quarter to 933.1 thousand tons, while there was no transshipment in the same period last year.
Overall for FY 2023, Kernel terminals transshipped 4 million 437.7 thousand tons of goods, 39% less than a year earlier, which the company attributed to failures in the grain deal.
“Russia terminated the grain deal on July 18, 2023. Thus, the Group’s future ability to export goods through Ukrainian Black Sea ports is unclear,” the report states.
“Kernel” recalled that on July 19, its assets in the port of “Chernomorsk” were subjected to a massive missile attack from Russia. As a result, grain transshipment facilities and grain stored in the port were significantly damaged. According to initial estimates, it will take considerable time to return the assets to operation.
According to the report, the group’s grain exports from Ukraine in the fourth quarter of FY 2023 amounted to 755,000 tons, down 8% from the previous quarter but 6 times higher than in the fourth quarter of FY 2022.
On a year-on-year basis, Kernel’s grain export volumes more than halved year-on-year to 3 million 833.2 thousand tons, the document specifies.
“Kernel” before the war ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agro-products and their sales.
Kernel’s net profit for the first nine months of 2023FY increased by 36% to $437 mln, while revenues fell by 45% to $2.715 bln.
