Kernel (KER) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenue reached USD 798 million, up 46% year-over-year, driven by resumed stable grain exports and higher global grain and oilseed prices; revenue declined 19% sequentially due to seasonality.

• Net profit attributable to shareholders was USD 121 million, a turnaround from a USD 31 million loss in Q1 FY2024, reflecting improved export conditions and a USD 42 million gain from biological asset revaluation.

• EBITDA rose to USD 169 million, a 9x increase year-over-year, with strong contributions from Infrastructure and Trading and Farming segments.

• Operating cash flow before working capital changes increased 2.8x year-over-year to USD 148 million, reflecting improved profitability and export activity.

Financial highlights

• Revenue: USD 798 million (+46% y-o-y; -19% q-o-q).

• EBITDA: USD 169 million (9x y-o-y); EBITDA margin 21% (up from 3% y-o-y).

• Net profit: USD 121 million (vs. USD 31 million loss y-o-y); EPS USD 0.41 (vs. -0.21 y-o-y).

• Net cash from operating activities: USD 56 million (vs. USD -95 million y-o-y).

• Net debt: USD 261 million as of 30 Sep 2024, down 7% from 30 Jun 2024.

Outlook and guidance

• Anticipates more adverse crushing season due to low sunflower seed harvest (12.2 million tons) and expanded processing capacity, pressuring margins.

• Power supply disruptions and energy infrastructure attacks may impact operational efficiency and costs.

• Group expects underutilization of processing capacities and increased soybean/rapeseed processing.

• Ukraine's GDP growth forecast revised upward to 4% for 2024, with continued risks from war and energy disruptions.