Kernel increased net debt more than fivefold despite profit growth

Agroholding Kernel ended the 2026 financial year with significant profit growth, but at the same time sharply increased its debt burden. The company's net debt as of June 30 reached $736 million against $143 million a year earlier - that is, it increased 5.1 times.

This is stated in Kernel Holding's annual report for the financial year ended June 30, 2026.

At the same time, the company's operating and financial results improved. Kernel's revenue increased by 7% - from $4.115 billion to $4.404 billion, EBITDA - by 20%, to $558 million, and net profit attributable to the company's shareholders increased by 35% - to $322 million.

EBITDA margin increased from 11.3% to 12.7%, and net margin - from 5.8% to 7.3%. At the same time, the net debt to EBITDA ratio rose from 0.3 to 1.3.

The increase in net debt occurred amid an active investment program, M&A deals, and a significant outflow of funds into working capital. Kernel's total debt obligations for the year increased by 44% - to $1.093 billion, while cash and cash equivalents decreased by 42% - from $618 million to $357 million.

One of the main areas of spending was the acquisition of Enselco Holding Limited. The acquisition of the company accounted for $338 million of cash outflow. Along with Enselco, Kernel obtained about 190 thousand hectares of leased agricultural land and related infrastructure.

Another $139 million the company invested in fixed assets. The funds were directed, in particular, to advance payments for equipment for wind and solar energy projects, restoration of the transshipment terminal in Chornomorsk, purchase of agricultural machinery and grain trucks.

Much more funds were needed for working capital. The outflow under this item increased from $103 million in the previous year to $361 million. Because of this, despite profit growth, net cash flow from operating activities decreased by 41% - from $242 million to $142 million.

Investment activities overall led to a net outflow of $442 million against $40 million a year earlier. For the entire financial year, Kernel's total cash outflow was $261 million.

The company itself calls the current debt burden manageable. At year-end, net debt/EBITDA stood at 1.3, and adjusted net debt/EBITDA - at 0.9.

At the same time, Kernel's board of directors recommended not paying dividends for the 2026 financial year. The company explains this by the need to preserve liquidity amid deteriorating export situation through the Black Sea, restoration of damaged assets, and possible additional investments in alternative logistics routes.

At the beginning of the new financial year, the situation for the company worsened due to new Russian strikes. They damaged Kernel's port infrastructure and increased risks for commercial shipping in the Black Sea. The company warns that it may need additional funds for asset restoration and development of alternative logistics.

According to: Kernel Holding.