Kernel reported 3Q FY 2013 production and sales volumes (after Polish market close), which were all down y/y (in a range of -7.0%-27.4%, the latter being bulk oil sales volumes that generated 54% of EBITDA in the last 2 years on average) except for grain export terminal throughput, which was up 5.1% y/y. Part of the bulk oil sales contracts were pushed into 4Q FY 2013 that explains y/y weakness in 3Q FY 2013 and grain sales normalized, which confirms that most of FY 2013 grain volumes were indeed in the early months after the harvest in 2012. We expect some pressure on Kernel shares in the near term as the FY 2013 EBITDA (US$ 350m) and net profit (US$ 200m) guidance (already lowered on February 28; current Bloomberg consensus figures match guidance)
could be slightly missed, according Kernel’s management FY 2013 outlook by Kernel:
Although Q4 FY2013 volumes and results are expected to be better than Q3 FY2013, full-year bulk oil sales and sunflower seed crushing volumes should be lower than initially anticipated. Based on 9M FY2013 results, Kernel management now expects full-year EBITDA and net income to be moderately below earlier guided figures of US$ 350m and US$ 200m, respectively.