Weekly success story: Kernel share price up 9.1% as company ends Q3 2014 with $22.3 million net income
2014-12-02 11:03:12
UkrAgroConsult reports 9.1% price per share growth for one of the largest producers of agricultural commodities and crusher in Black Sea region, Kernel. Company’s price per share grew to PLN 26.25 over November 26 trading session as company’s report revealed $22.3 million net income for the third quarter of 2014.
Kernel share price performance, PLN
*- Warsaw Stock Exchange, UkrAgroConsult Database
According to official reports, released, company managed to grow its sales revenue by 40.3% to $579 million compared to the same period in 2013. COGS rose only by 23.4% to -$466 million. Operating profit-expenses difference, as well as financial expenses-income difference were 5.4% and 213.6% higher respectively. Company’s $22.3 million net income figure said to reflect loss on devaluation of Ukrainian Hryvnya of $17.2 million.
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Kernel |
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|
Indicator |
unit |
9M 2014 |
Change, yoy, % |
|
Total sales revenue |
USD thousands |
579 162 |
40,3% |
|
Change in bio/ag assets |
USD thousands |
-1 647 |
-82,5% |
|
COGS |
USD thousands |
-465 982 |
23,4% |
|
Net revenue |
USD thousands |
111 533 |
332,7% |
|
Operating Profit-Expenses |
USD thousands |
-51 164 |
5,4% |
|
Financial Revenues-Expenses |
USD thousands |
-35 235 |
213,6% |
|
EBIT |
USD thousands |
25 134 |
-173,9% |
|
Tax |
USD thousands |
-1 056 |
-141,4% |
|
Net income (loss) |
USD thousands |
24 078 |
170,9% |
|
|
|
|
|
|
Cash flow from operating activities |
USD thousands |
46 003 |
228,2% |
|
Cash flow from investing activities |
USD thousands |
-11 636 |
31,7% |
|
Cash flow from financing activities |
USD thousands |
-45 230 |
-178,0% |
|
Cash for the period |
USD thousands |
-10 863 |
-315,6% |
Company’s successful performance under high pressure of external factors is attributed to several factors. First, company managed to significantly increase sunflower crushing volume by 2.2 times to 506 386 tons compared to the same period in 2013. As the result, company’s sunflower oil sales were significantly higher. Profitability per ton in the segment reached USD 202 per ton compared to USD 164 per ton in the same period of 2013 – an 18.81% increase. Company also referenced lower competition in the market, which contributed to growth of sales.
Second, company increased exports sales of grains by impressive 38%. Company states that crops were 16-29% higher, allowing for lower costs per ton of crop. At the same time, it is vital to note that company had negative cash flow for the period as the result of significant increase of financial expenses. Finally, throughput of export terminals was 56% higher due to significant increase of exports of agricultural commodities.
UkrAgroConsult always welcomes positive performance of the companies that prove viability of their strategic approach. At the same time, we would like to note negative result for the cash flows for the period as company’s cash at the end of the period has indicated declining trend over the past 4 years. Such tendency may become a factor that would affect company’s ability to repay interest on borrowings in the future. It is in no way an imminent threat, given the most recent report.