Kernel, a large Ukrainian agricultural holding, saw $59.61 million in net profit in the first quarter of FY2020 (July 2019 – June 2020), which is 24% less than in the first quarter of FY2019 over the IFRS 16 impact.
According to a report of Kernel Holding S.A. (Luxembourg) on Wednesday, revenue reduced 26% year-over-year to $845.84 million, stemming from lower trading volumes.
However, earnings before interest, taxes, depreciation and amortization (EBITDA) added 6% year-over-year to $106.5 million driven by Oilseed Processing segment EBITDA small growth.
In particular, Oilseed Processing segment EBITDA reached $22 million (up 38% year-over-year). Infrastructure and Trading segment generated $35 million EBITDA, 8% decline year-over-year. Unallocated corporate expenses in the reporting period amounted to $9 million, up 40% year-over-year.
The company said that the general outlook for the segment’s performance in FY2020 remains positive. Kernel expects Infrastructure and Trading business to be the largest contributor to group’s EBITDA in FY2020 owing to: commissioning of new grain export terminal scheduled for January 2020; growing grain export volumes; and strong contribution of grain railcars business.
Kernel said that at the date of this report, we completed this year harvesting campaign on 513,000 hectares, reaching record ever net yields for wheat (5.9 tonnes per hectare, up 16% year-over-year) and sunflower (3.5 tonnes per hectare, up 11% year-over-year), while facing normalization of corn yields to 8.6 tonnes per hectare (down 13% year-over-year).
“For the whole FY2020, we expect over $100 million farming EBITDA (net of IAS 41 and IFRS 16 effects), weakened by corn yield decline, lower year-over-year grain prices and growing production costs enhanced by local currency appreciation,” the group said.
Kernel’s gross profit in Q1 FY2020 fell by 9.9%, to $85.85 million, and operating profit – by 0.5%, to $82.09 million.
Net debt as of September 30, 2019 reached $1.144 billion, up 65% from June 30, 2019 level, reflecting short-term borrowings increase to finance working capital needs at the beginning of the season as well as $307 million new lease liabilities added to the balance sheet after implementation of IFRS 16.
Readily marketable inventories (RMI) increased by $275 million over Q1 FY2020, to $568 million, driven by procurement of grain and sunflower seeds.
Consequently, net debt adjusted for RMI increased to $576 million on September 30, 2019 from $400 million on June 30, 2019, with growth solely arising from IFRS 16 introduction. As a result, Kernel leverage as of September 30, 2019 increased to 3.3x Net-debt-to-EBITDA and 3.7x EBITDA-to-interest (post IFRS 16).
The enterprises and organizations of Ukraine in January-September 2019 increased pretax profit from ordinary activities by 74.43%, to UAH 342.8 billion (UAH 196.5 billion in January-September 2018), the State Statistics Service has said. According to the service, in January-September 2019 Ukrainian enterprises that worked profitably received UAH 454.978 billion in profit, which is 28.9% more than in the same period in 2018.
At the same time, 22.7% of enterprises worked with a negative financial result. Their losses in January-September of this year decreased by 28.3% compared with January-September of last year, to UAH 112.169 billion.
The net profit of state-run Ukrgasbank (Kyiv) in 2019 may amount to UAH 1 billion, which is 30% more than in 2018 (UAH 768.698 million).
“At the end of the year, a profit of UAH 1 billion is expected, which corresponds to the financial result outlined in the bank’s development strategy for 2019-2021. Such plans were approved by the supervisory board of Ukrgasbank,” the bank said on its website on Tuesday.
According to First Deputy Board Chairman Oleksandr Dubrovin, it is planned that by the end of 2019, the bank’s return on capital will be 15.8%.
“The bank is improving its efficiency, and according to the results of 2019, we expect that the return on capital will be 15.8% compared to 13.8% in 2018,” he said.
In addition, Dubrovin said that the cost-income ratio (CIR) is expected to improve from 57% in 2018 to 55% in 2019.
As reported, Ukrgasbank’s net profit in January-October 2019 amounted to UAH 576.3 million, which is 7.1% more compared to the respective period of 2018 (UAH 538 million).
JSB Ukrgasbank was established in 1993. The state represented by the Ministry of Finance owns 94.94% of the shares of the financial institution.
According to the National Bank of Ukraine, as of October 1, 2019, Ukrgasbank ranked fourth in terms of total assets (UAH 114.133 billion) among 76 banks operating in the country.
Myronivsky Hliboproduct (MHP) in July-September 2019 received a net profit of $104.1 million, while in the same period in 2018 it saw a net loss of $48.8 million.
According to the holding’s quarterly financial statements posted on the London Stock Exchange, its revenue in the third quarter increased by 26.8%, to $559.8 million, and EBITDA by 10.1%, to $109 million.
MHP’s gross profit increased by 2.2%, to $93.9 million, while operating profit fell by 43.8%, to $39.8 million.
The agricultural holding explains the net profit figures with positive exchange rate differences in the reporting period in the amount of $109 million compared to a foreign exchange loss of $88 million in the third quarter of 2018.
MHP notes that over the indicated period, export revenue reached $317 million, which is 57% of total revenue (in the third quarter of 2018 some $223 million, 57% of total revenue).
The net profit of Astarta agricultural holding, the largest sugar producer in Ukraine, in January-September 2019 totaled EUR 4.3 million, which is almost 71% less than a year ago.
According to a company reported on the Warsaw Stock Exchange (WSE), its consolidated revenue grew by 31.6%, to EUR 333.6 million mainly driven by strong sales of agricultural produce. Export sales were up contributing 58% of the company’s revenues. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 33.1%, to EUR 45.5 million, EBITDA margin from 27% to 14%. Gross profit fell by 34.4%, to EUR 57.1 million.
Revenues of the sugar segment stood at EUR 86.8 million (down by 10% year-over-year) on lower sales volumes and flat prices. Export sales share was 6% (16,000 tonnes).
The agricultural segment contributed 47% to the total revenues, or EUR 155 million, on 2.6-fold growth of corn sales volumes. Grain exports sales totaled 85% of segment revenue.
The soybean processing segment generated EUR 61.5 million of revenues (up by 15% year-over-year) on stronger sales volumes of key products. Some 89% sales were export sales.
Astarta said that the dairy revenues increased by 17% year-over-year to EUR 24.9 million as a result of better pricing environment. All revenue were received in Ukraine.
“Capex was reduced to maintenance levels across the segments apart from finalizing the EUR 61 million five-year investment project of completing 550,000 silo storage facilities in 2019,” the company said.
Astarta is a vertically integrated agribusiness holding operating in eight regions of Ukraine. The holding includes eight sugar factories, agricultural enterprises with a land bank of 243,000 hectares and dairy farms, a biogas plant and a soybean processing complex in Poltava region.
IMC agricultural holding in January-September 2019 saw $18.35 million in net profit, which is 43% less than a year ago.
According to a company report on the Warsaw Stock Exchange (WSE), revenue over the period grew by 46%, to $118.77 million.
Gross profit fell by 19%, to $48.54 million, and operating profit – by 42%, to $22.81 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) over the period fell by 21%, to $39.96 million.
As of September 30, 2019 noncurrent liabilities of the company totaled $108.95 million compared with $24.93 million as of late September 2018. Current liabilities reached $89.03 million ($81.39 million).
After the reporting period, IMC repaid loans and interest in the amount of $4.72 million and received loans in the amount of $2.85 million.
According to the document, revenue from the sale of corn for the reporting period increased 54%, to $93.34 million, wheat 2.2 times, to $12.77 million, soybeans 22%, to $2.22 million, milk 12%, to $1.13 million. At the same time, revenue from the sale of sunflower decreased 14%, to $7.52 million.
IMC specializes in growing grains, oilseeds and milk production in Ukraine. The agricultural holding processes about 130,000 hectares of land in Poltava, Chernihiv, and Sumy regions. It owns storage capacities of 554,000 tonnes of grains and oilseeds.
