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Fitch revises Kernel's outlook to positive, affirms ratings at 'BB-'
KYIV. Sept 16 (Interfax-Ukraine) – Fitch Ratings has revised Ukrainian commodity processor Kernel Holding S.A.’s Outlook to Positive from Stable. Its Long-Term Foreign- (FC) and Local-Currency (LC) Long-Term Issuer Default Ratings (IDR) have been affirmed at ‘BB-‘.
"The Outlook revision reflects Fitch’s expectations that Kernel will maintain its conservative capital structure after completion of its expansion programme in FY22 (ending June 2022). This, together with increasing scale, improved product diversification and a record of financial discipline, points to a strengthening credit profile," Fitch said in a press release.
According to Fitch, Kernel’s FC IDR continues to benefit from a two-notch uplift from the Ukrainian Country Ceiling of ‘B’, due to strong hard-currency debt service ratios. The Positive Outlook for the FC IDR also captures an improving operating environment in Ukraine (B/Positive).
"We expect Kernel to post a second year of record EBITDA in FY21 of around $690 million (FY20: $436 million as adjusted by Fitch). We assume profit growth will be mainly driven by strong results in the trading, infrastructure and farming segments," Fitch said.
Fitch expects normalisation of profits in trading in FY22-FY24, which together with a recovery of margin in the oil division should result in sustainable annual EBITDA at around $400 million.
Kernel is a large producer and exporter of sunflower oil, operating in the production, export and domestic sales of sunflower oil, crop production, export of grain crops, provision of services for storage and transshipment of grain at elevators and port terminals.
