Kernel net profit in Q1 FY2020 declined 24% y-o-y

In Q1 FY2020 (July 2019 – June 2020), net profit of Kernel declined 24% y-o-y to USD 59.6 mln.

Kernel revenue in Q1 FY2020 amounted to USD 846 mln, down 26% y-o-y due to lower Avere physical trading volumes. As a matter of fact, Avere physical trade normally has a limited impact on profitability, as it is used mostly to support Avere proprietary trade operations, the company's report reads.

EBITDA in July-September 2019 added 6% y-o-y to USD 107 mln.

Net margin in the reporting period increased 0.4pp from 6.6% in Q1 FY2019 to 7%.

Earnings per share (EPS) dropped 21% to USD 0.73.

"For the whole FY2020, we expect over USD 100 mln farming EBITDA (net of IAS 41 and IFRS 16 effects), weakened by corn yield decline, lower y-o-y grain prices and growing production costs enhanced by local currency appreciation," the report states.

Oilseed Processing segment EBITDA increased by 38% y-o-y, to USD 22 mln, Farming segment EBITDA amounted to USD 58 mln, 10% up. Infrastructure and Trading segment EBITDA squeezed by 8% y-o-y, to USD 35 mln.

Previously reported that Kononiv Elevator LLC, Lazirky, a structural division of Kernel, shipped 100 thou. t of agricultural commodities within 30 days. This is a record volume for the company and grain storages in Ukraine.