Kernel reports USD 101.8 million loss, as top management expects improvement in 2015
2014-10-21 16:10:17
According to the official information, released by the company on its official website, Kernel finished 2014 marketing year (July 1, 2013 – June 30, 2014) with total sales revenue decrease of -15% at USD 2 393 million compared to the previous year. Company’s COGS expense decreased by -17.5% to USD -1 968 million, leading to slight decrease of net revenue by -0.7% to USD 408.2 million. Main reasons for weak performance of the company were lack of sunflower seeds for processing in 2013, as well as weak farming operations’ results through the entire marketing year. Company’s increased distribution costs, as well as lower operational income lead to overall growth of operating profit-expenses by 33.1%. Sharp increase in financial expenses is explained by loss on forex as well as losses on financial derivatives, valuation of assets and losses of property, plant and equipment. Net loss of the company totaled to USD -101.8 million compared to USD 114.9 million for the same period in the previous year.
Company’s management stated both: external and internal reasons for its poor performance in 2014. External factors were declining commodity prices, given high expected crops in the U.S., devaluation of Ukrainian currency and political situation in Ukraine, as well as geopolitical situation in the region. Internal reasons included mainly poor results of farming operations segment. Company stated that it is ready to continue carrying out its liabilities, including payments of dividends. As 90% of company’s revenues are based on USD as well as 80% of company’s expenses, 2015 is expected to reflect the benefits such operational approach with stronger financial results.
UkrAgroConsult has completed review and recommendations study on investing in Ukrainian Agrarian Sector. You can follow this link to find out more about the study “How to profit from Ukraine’s agricultural sector?”. In case you are interested in state of agrarian sector in Ukraine, please follow the link below to read UkrAgroConsult quarterly report “Agrarian Business in Ukraine”. You can subscribe to the report to receive it on a monthly basis.