Analysts expect Kernel EBITDA margin to slide at season 2020 end

The rise in sunflower oil prices supported Kernel’s oilseed processing margin, while it sees a risk that its EBITDA margin will slide to below USD 100/t at the end of the 2020 season, the investment analyst at Concorde Capital Andriy Perederey said.

Also, as he notes, the company’s infrastructure and trading segment EBITDA growth was driven by profitable Avere trading activities, while segment margins were lower yoy in 1QFY21.

"Kernel’s farming segment EBITDA was boosted by positive price dynamics for crops and a revaluation of biological assets which contributed USD 107 mln in 1QFY21. So, we are likely to see some decrease in Kernel’s EBITDA in the next quarters, and we remain neutral on KERPW bonds," commented Andriy Perederey.

Kernel reported USD 123 mln of net profit in FY 2020, 31% lower YoY (FY 2019: USD 179 mln).

As a reminder, Kernel Holdings S.A. announced the issue of USD 300 mln aggregate principal amount of 6.750% notes due 2027 priced at par.