Kernel, one of the largest Ukrainian agricultural holdings, received $133 million in net profit in the second quarter of the 2024 financial year (FY, July 2023-June 2024), which is 36% less than in the second quarter of FY 2023.

“Net income in the second quarter of 2024 was $133 million, down 36% from the prior quarter but significantly better than the $31 million loss recognized in the prior quarter, highlighting the volatility of the group's earnings depending on the operating environment,” stated the company’s report on the Warsaw Stock Exchange on Monday.

Kernel's consolidated revenue in the second quarter of FY2024 decreased by 16% compared to the second quarter, to $1.044 billion, due to lower prices for grain and sunflower oil.

At the same time, it noted that compared to the previous quarter, revenue grew by 91% due to increased exports through Black Sea ports, which were unavailable for operations during the first three months of the fiscal year 2024.

Kernel clarified that the net loss from changes in the fair value of biological assets amounted to $12 million against the background of low prices for grain and oilseeds, however, the cost of sales also decreased by 14% compared to the same period last year - to $813 million. As a result, the gross profit for the second quarter of FY2024 decreased by 26% compared to the same period last year, but increased 4.2 times compared to the previous quarter, amounting to $218 million.

It states that other operating income for the October-December period was $41 million, mainly due to a one-time insurance payment of $33 million for property damage and business interruption.

Kernel also recognized a net loss of $9 million due to the write-off of inventories and fixed assets in connection with Russian attacks on port infrastructure.

According to the report, the company's EBITDA for the second quarter of FY2024 decreased by 26% compared to the same period last year - to $205 million, which, however, was 10 times higher than the level of the previous quarter, reflecting a significant improvement in operating conditions, taking into account the availability of Ukrainian Black Sea ports for export operations.

“However, despite the improved operating environment, risks remain high, the main ones being risks associated with the war in Ukraine and low global prices for soft commodities,” Kernel noted.

The report shows that in the second quarter, $41 million was spent on investment in property, plant and equipment, including the purchase of a Supramax bulk carrier, but the withdrawal of $210 million in deposits previously used as collateral on certain lines of credit resulted in cash inflow from investing activities of $165 million.