Kernel is one of the lowest-risk corporate borrowers on the market — Adamant Capital

Adamant Capital specialists continue to view Kernel as one of the lowest-risk corporate borrowers out of Ukraine on the market, given that leverage adjusted for readily marketable inventories is likely to remain at c. 1.2x at the end of FY19 despite extensive capex.

Quarterly EBITDA came in above expectations predominantly due to a surprise Avere (a Swiss Kernel subsidiary Avere Commodities SA) contribution of c. USD 10 mln and somewhat higher bulk oil profitability than anticipated. Taking also into account the upward revision of management guidance for grain sales volumes Adamant Capital upgrades its annual EBITDA projection for the company by 13% to USD 340 mln.

"We note, however, that the figure is heavily dependent on USD 160 mln of profits being delivered by the farming segment, out of which only 7% has been confirmed by financial results so far (the company fell 18% short of its announced target last year)," experts note.

Previously Kernel informed that the company was set to export 6.2 million tons of grain from Ukraine in FY2019.

The new infographic guide Agribusiness of Ukraine 2017/18 is available by the link.