Sunflower oil-to-corn growing group Kernel Holding has reported a 24% fall in quarterly profits as a result of the ongoing US-China trade war and outbreak of African swine flu in China.
The Ukraine firm, which is the country’s largest grain exporter, posted an EBITDA for the three months to the end of March of $55.3m - down from $73.1m in the same quarter of 2018 - on the back of revenues which rose by 48% year-on-year to $802.5m.
While its sunflower oil and farming divisions delivered earnings growth, the group said the global events had led to a "sizable loss" in its Swiss-based Avere commodities trading arm which in turn depressed earnings wthin its infrastructure business from $50.1m to $18.0m.
Kernel reiterated its plan to export between 6.0m tonnes and 6.2m tonnes of grain by the end of the 2019 year. In its latest WASDE forecast, the US Department of Agriculture (USDA) estimates Ukraine’s total coarse grain exports from the country for the 2019-20 season will be 32.39m tonnes.
The group supplied 1.5m tonnes of grain for export during Q3, up 63%, as a result of a record 2018 harvest within its farming business, in turn optimising capacity within its shipping infrastructure.
Three months ago it announced it had become the top exporter in the Ukraine, against the likes of multinationals Bunge, Cargill, Cofco, Glencore, Louis Dreyfus and Nibulon.
And it said recent weather conditions had been "supportive" for winter crops. "It makes us expect a relatively strong 2019 harvest of wheat, barley and rapeseed," but the company sounded uncertainty for spring crops such as corn, sunflower and soybean.
The Group’s farming subsidiary business, which specialises in the production of corn, wheat, soybean, sunflower seed, and rapeseed, saw revenues increase 25% to $156.9m in Q3, resulting in $17.7m EBITDA.
In its sunflower division, Kernel’s oil-extraction plants processed the "highest-ever volumes" for the third quarter, an increase of 7% year-on-year with with 908,000 tonnes of sunflower seeds handled output during the period.
That helped the division post EBITDA of $30.8m - up 83% - and the firm said it was "committed" to a year-end production total of 3.1m tonnes of the crop.
The signs of a strong harvest have led to revisions of Ukraine’s production of corn and wheat. Refinitiv edged up its wheat production estimate for the country on Wednesday to 26.3m tonnes - slightly increased from 26.1m tonnes back in June.