OREANDA-NEWS. August 31, 2010. Kernel Group (WSE: KER PW) released its fiscal FY10 results, according to which top line revenue declined by 2.5% y-o-y to USD 1,021 mln while EBITDA remained flat at USD 190.7 mln (EBITDA margin: 18.7%, +0.5 pp y-o-y). Net income was up 20.3% y-o-y to USD 152.6 mln, as net margin improved 2.8 pp y-o-y to 14.9%. Net debt was up 73% y-o-y to USD 285.6 mln as of June 30, 2010, implying a FY10 net debt-to-EBITDA of 1.50x vs. 0.87x in 2009. The company sets guidance for FY11 at USD 1.3 bln (+27% y-o-y) for sales, USD 255 mln (+34% y-o-y) for EBITDA, and USD 195 mln (+28% y-o-y) for net income and will host a conference call on Tuesday, August 31.

Concorde Capital: the financials reported were in line with Kernel’s FY10 guidance (sales: USD 1,050 mln; EBITDA: USD 195 mln; net profit: USD 155 mln) and thus, in our view, are already priced into the stock. Kernel’s weaker FY10 sales reflect an average 20-35% y-o-y drop in sunoil and grain prices, offset by an estimated growth in bottled oil and bulk oil sales to 112 mln liters (+15% y-o-y) and 362 ths mt (+66% y-o-y), respectively.