Analysts explained the worsening of Kernel's results in FY 2018
Kernel's EBITDA in the financial year 2018 may reach USD 280-310 million.
This forecast was made by the investment analysts, commenting on the financial performance of the company reflected in the report.
"Based on the weaker margin in its sunflower segment, we are downgrading our FY 2018 EBITDA estimate to USD 280-310 mln," comments Andrew Perederey, analyst at Concorde Capital.
After the publication of the report for Q1 FY 2017, analysts of Concorde Capital forecast EBITDA for FY 2018 at the level of USD 310 million, provided that sunflower processing margin will drop to USD 51 per ton.
According to the company's message on the Warsaw Stock Exchange, Kernel projects EBITDA in FY 2018 at a level not lower than USD 210 million.
"In FY 2018, we expect EBITDA to exceed USD 210 million, but it will be below USD 250 million, depending on operating expenses and financial costs," says Yury Kovalchuk, Member of the company's Board of Directors.
Reference: Kernel's net profit for Q1 FY 2018 decreased by 64%.
According to Dmitriy Malinovskiy, analyst of the investment company Empire State Capital Partners, the main driver of changes in the Kernel's balance was the first coupon payment on Eurobonds issued earlier this year, which simultaneously reduced cash and cash equivalents and short-term loans.
"Despite a significant revenue growth, Kernel’s net profit for the period reduced, as a result of respective growth of cost of sales as well as of smaller gains from biological assets revaluation," analyst notes.