Fitch affirms Kernel at 'B+' with stable outlook

Fitch Ratings affirmed Long-Term Issuer Default Rating (LT FC IDR) of Kernel Holding S.A. at ‘B+’ with Stable Outlook.

The rating incorporates a leverage spike and weak operating results expected for the financial year ended June 2018 due to a challenging operating environment.

"Fitch Ratings expects a rebound in profits and an improvement in leverage, due to Kernel's expansion plans and strong support from the group relationship banks. The agency noted that Kernel is at an advanced stage of obtaining a long-term funding from the European Investment Bank in the amount of up to USD 250 million to cover its FY2019 capital expenditures, seeing limited execution risk in Kernel's expansion plans," the analysts note.

Fitch Ratings also affirmed Kernel’s National Long-Term Rating at ‘AAA (ukr)’.

In FY 2018 (July 2017–June 2018), Kernel reduced the net profit attributable to equity holders of the company by 71.% to USD 52.1 million.