22 February 2017
Upgrade followed successful Eurobonds placement by the largest Ukrainian sunflower oil producer, so that debt maturity profile of the company is to be largely improved.
Fitch noted strong performance of Kernel during last two years and export-oriented structure of its business (the share of export in total proceeds is above 90%).
Agency analysts also estimate that after relatively stable financial results in financial year 2016-2017 (vs. previous one), EBITDA of the company can decline to USD 250-260M in FY2018 (due to higher crop-growing crops and more conservative yields assumptions for the farming division).
Our base case view is slightly more positive as we see EBITDA at about USD 300M as fully sustainable for Kernel (composed of USD 100M for Farming direction (vs. current season estimations of USD 160-170M), USD 100M – Oilseeds crushing (with about 8-9% EBITDA margin) and remaining USD 100M for Grains trading, silo and port terminals operations). Financial results of different business directions of Kernel during last years look as follows:
USD mln
Q1 2017
Q1 2016
..
FY2016
FY2015
FY2014
Oilseeds crushing
Sales
176
190
1 134
1 214
1 211
EBITDA
12.6
25.9
128.8
213.1
177.8
EBITDA margin, %
7%
14%
11%
18%
15%
Grains trading
Sales
200
176
822
1 053
1 053
EBITDA
4.3
10.4
46.3
59.4
59.4
EBITDA margin, %
2.2%
5.9%
5.6%
5.6%
5.6%
Farming
Sales
146
56
358
310
290
EBITDA
77.7
16.0
146.0
97.9
-44.3
EBITDA margin, %
53.1%
28.5%
40.8%
31.5%
-15.3%
Export terminals
Sales
12.4
9.2
57.3
55.3
45.5
EBITDA
10.5
5.5
37.5
36.8
27.3
EBITDA margin, %
84.7%
60.0%
65.4%
66.5%
60.0%
Silo
Sales
10.5
8.5
38.2
42.4
74.5
EBITDA
7.1
5.1
23.4
18.3
39.2
EBITDA margin, %
67.6%
60.0%
61.3%
43.2%
52.6%
Popular on site:
Kernel reports financials for Q1 FY2017
Kernel publishes operating results for Q2 FY2017
Ukrainian sunflower seeds and oil market