Ukrainian agricultural holding Kernel cuts net profit by 2.5 times in Q3 2025
Kernel, one of the largest Ukrainian agricultural holdings, received $41 million in net profit in Q3 FY2025 (January-March 2025), compared to $101 million for the same period of FY2024.
According to the quarterly report published on the company's website, Kernel's consolidated revenue in Q3 FY2025 reached $1,145 million, an increase of 14% compared to the same period last year, but remained at the level of the previous quarter.
"The performance was supported by strong sale prices, while increased grain export volumes offset the decline in bottled oil revenue," the company said.
The Group's cost of sales increased by 27% y-o-y, amounting to $984 million, primarily attributed to the concurrent rise in costs for goods available for sale and raw materials used, which reflects heightened competition for feedstock and constraints in supply.
Gross profit for Q3 FY2025 amounted to $137 million, down 34% y-o-y, reflecting the squeeze in margins within the Oilseed Processing and Infrastructure and Trading segments.
During the reporting period, Kernel’s EBITDA settled at $110 million, down 6% q-o-q and 31% y-o-y. The Oilseeds Processing delivered EBITDA of $36 million, down 26% y-o-y, on the back of both lower sales volumes and compressed margins due to relatively low harvest of sunflower seeds in Ukraine.
The Infrastructure and Trading segment EBITDA plunged by 46% y-o-y, standing at $62 million in the reporting period. Of this, Avere's trading activities contributed $26 million. The remainder, $36 million, was earned through the grain and edible oil export value chain in Ukraine, with export terminals and grain trading operations being the main performance drivers.
In Q3 FY2025, the Farming segment recorded EBITDA of $34 million, representing a 2.1x y-o-y increase. This figure also includes a non-cash loss of $24 million stemming from the revaluation of biological assets.
According to the report, cash inflow from investing activities came to $25 million, primarily reflecting $46 million in proceeds from the disposal of financial assets previously used to manage excess liquidity. Meanwhile, $19 million was utilized to purchase property, plant, and equipment.
Kernel said that after passing the peak of working capital financing, the Group repaid a significant portion of its debt, including fully repaying its debt to the EBRD and the sunflower oil PXF, as well as repaying in advance a portion of outstanding amounts due to the EIB.
During January-March 2025, the Group’s debt liabilities decreased by $190 million (or 20% reduction q-o-q), reaching $755 million by the end of the reporting period. In parallel, the Group successfully secured an extended waiver from one of its long-term lenders effective until 30 June 2026. This has enabled the group to reclassify its bank borrowings with an initial long-term contractual maturity as non-current liabilities, reflecting improved financial stability.
As of 31 March 2025, the group's cash balance amounted to $549 million, representing an 11% q-o-q decline, primarily attributable to significant cash outflows from financing activities. This led to a 37% q-o-q reduction in net debt, which stood at $206 million at the end of the reporting period.
Over Q3 FY2025, commodity inventories declined by 16%, totaling $371 million as of 31 March 2025.
According to the report, overall, in the first 9 months of this financial year, Kernel increased its net profit by 7% to $218 million, with revenue growing by 19% to $3 billion 92 million, and its EBITDA increased by 4% to $398 million.
Before the war, the Kernel agricultural holding held the first place in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%). It is one of the largest producers and sellers of bottled oil in Ukraine. In addition, it is engaged in the cultivation of agricultural products and their sale.
