Kernel (KER) Q4 2024 earnings summary

Executive summary

• Revenue increased 4% year-over-year to $3,581 million, driven by higher sales volumes despite lower prices and ongoing war-related disruptions in Ukraine.

• EBITDA declined 30% year-over-year to $381 million, impacted by over $200 million in non-cash impairment losses and margin pressure from weak global prices.

• Net profit attributable to shareholders fell 44% year-over-year to $168 million, with total comprehensive income up 7% to $63 million due to foreign exchange effects.

• The business environment remained volatile due to the war, with significant operational disruptions, asset damage, and high human capital risks.

• Liquidity improved after debt repayments and restructuring, with net debt/EBITDA at 0.7x and a strong cash position.

Financial highlights

• Revenue: $3,581 million (+4% year-over-year); EBITDA: $381 million (-30% year-over-year); Net profit: $168 million (-44% year-over-year).

• EBITDA margin dropped to 10.6% from 15.8% year-over-year; net margin fell to 4.7% from 8.7%.

• Operating cash flow: $472 million (-34% year-over-year); net cash outflow: $145 million.

• Over $229 million in impairment losses recognized, mainly in oilseed processing and port assets.

• Finance costs decreased 22% year-over-year to $119 million due to lower debt.

Outlook and guidance

• FY2025 expected to be challenging due to a projected 17% drop in sunflower harvest and 21% decline in corn harvest, leading to tight supply and margin pressure.

• Ongoing war risks, potential export route disruptions, asset damage, and power outages remain critical threats.

• Management anticipates lower capacity utilization and profitability, with a focus on liquidity and cautious capital allocation.

• No dividend recommended for FY2024 due to uncertainties.