7 Sep 2023 17:08

Ukraine's Kernel agro holding reports new losses of assets at Danube ports, currently assessing damage

MOSCOW. Sept 7 (Interfax) - Subsidiaries of Ukraine's Kernel agro holding, which exports sunflower oil, have lost a number of facilities at ports on the Danube River, Ukrainian media reported, citing the company's report on the Warsaw Stock Exchange.

According to Kernel, "key port infrastructure on the Danube, which is vital for the activities of the agroholding's subsidiaries that export sunflower oil from the region," was damaged in early September.

Specifically, "many critical facilities, including storage tanks for vegetable oil; equipment necessary for transshipment, including pipelines; railway receiving facilities; railway tanks awaiting unloading; and an administrative building" suffered damage on September 2.

Kernel is currently assessing the amount of the damage suffered.

Additionally, "grain warehouses operated by the port operator in the Danube Region, which provides Kernel with important grain transshipment services," suffered damage on September 3. Two storage facilities with total capacity of 5,000 tonnes were completely destroyed, and "two additional storage facilities with the same capacity were damaged and temporarily cannot be used for storing grain."

As noted, the operations of several of the company's facilities at the Danube ports were disrupted on September 6; "however, there was fortunately no substantial damage, although the operational activities of the assets were disrupted."

Kernel has also reported that it exported 92,000 tonnes of grain, 67,000 tonnes of sunflower meal, and 98,000 tonnes of sunflower oil in August 2023. "Export volumes have been undermined by the problems facing the company, like the inability to export goods through Ukraine's Black Sea ports," as well as the destruction of Ukraine's port infrastructure on the Danube, "which has seriously disrupted river-borne export logistics," according to the statement.

Kernel had previously estimated losses from damage or the destruction of assets to be at least $32 million in July-August. The company has forecast that the repairs could require up to 12 months in some cases. The holding has indicated that the damaged equipment and inventories had not been insured against these unforeseen events, thereby affecting the group's liquidity negatively.

Kernel agroholding is the largest producer and exporter of sunflower oil in Ukraine, and produces and exports vegetable oil. The company also cultivates agricultural products and sells them.

Ukrainian entrepreneur Andrei Verevsky is Kernel's largest co-owner through Namsen Ltd. Verevsky increased his stake from 41.3% to 74.05% this year as part of a share buyback and the company's planned delisting from the Warsaw Stock Exchange.