Friday, January 23, 2015

Kernel operating report Q2 2015

Kernel, front page, operating report, Q2, 2015

Today Kernel arrived with their half year operating report. The share price directly dropped by almost -4% and I have to admit that I directly became annoyed when I started reading the report. What was then in it?

The report in full you can find here. For my previous summary please see Kernel report Q1 2015.

The thing that made me annoyed was this:

Kernel, announcement, Q2, 2015

And it is not the first point that drives me up the wall... 3.75 million shares the managers will give themselves over the next five years! In todays share price value that corresponds to around 26 million euro! That is simply too much of a bonus for them to give themselves and it also explains why they started to buy back shares... I thought it was for the benefit of the shareholders but obviously it was to feed their own greedy pockets! Only benefit is that happily the share price is currently low so it is indeed a good moment to do share buy back... it is just the use of those shares that annoys me.

Besides from making me directly angry I must admit that there were some good tables showing the volumes sold as can be seen below. They keep pushing up the grain by almost 20% and the cash cow has increased with 35% and 8% compared to in 2014 so this is indeed good news. The crushing of seeds is up 26% and the export is up almost 30% but very money is generated from that.

Kernel, volume, H1, 2015

Conclusion: Kernel keep improving the quantity sold which to a certain extent counter out the decreased prices. For the very first time Kernels management also made me annoyed and what worries me is that each time that has happened in other companies the share price has started to fall. I will remain shareholder in Kernel since the fundamentals of the company has not changed but I will most likely start looking more critically on them from now on.

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