Page 68 - UKRRptMar19

Ukrainian sunflower oil producer Kernel has acquired a 100% stake in RTK-Ukraine, a company that owns and operates a fleet of 2,949 grain railcars, Kernel said in a statement on February 18. The deal’s enterprise value is $64mn, including $49mn cash consideration already paid. Kernel estimates the acquisition will contribute up to $20mn to its annual Ebitda. Andriy Perederey at Kyiv-based brokerage Concorde Capital agrees that with the estimate of the deal's $20mn annual effect on Ebitda, which implies an EV/Ebitda of about 3.2x. "As Kernel’s forward-looking Ebitda multiple is more than 5x, the deal looks value-creative for the company. The new railcar fleet will improve the company’s infrastructure and trading division and will augment its vertical integration. All in all, this deal looks positive for Kernel’s equity story," he wrote in a note on February 19.
Ebitda of Ukraine's sunflower oil producer Kernel jumped by 67.9% year-on-year (a 28.5% quarter-on-quarter improvement)to $129.3mn in 2QFY19, the company reported on February 28. The company’s 2QFY19 revenue was $1,115mn, more than double y/y and 2.2% less q/q. Its 2QFY19 Ebitda in its bulk oil segment improved 2.0-fold y/y (or 2.5-fold q/q) to $35.1mn in 2QFY19.The company’s grain trading Ebitda decreased 14.5% y/y (or a 70.7% q/q plunge) to $7.1mn and its export terminals division’s Ebitda slid 2.9% y/y (or 19.3% higher q/q) to $9.9mn in 2QFY19. Kernel's silo services division contributed $23.4mn to total Ebitda, which is a 21.5% y/y decrease (or 4.0-fold q/q surge). The company’s farming division Ebitda advanced 3.4-fold y/y (and 17.0% q/q) to $61.8mn. In 1HFY19, the company’s revenue more than doubled y/y to $2,255mn, while its total Ebitda jumped 1.9-fold y/y to $229.9mn. Andriy Perederey at Kyiv-based brokerage Concorde Capital wrote in a note on February 28 that the company’s 1HFY19 Ebitda was higher than our estimates due to stronger sunflower oil segment Ebitda and better results in silo storage and farming. Also, the company’s sunflower oil Ebitda margin was higher than our expectations.
Ukrainian farmer and leading sunflower oil producer Kernel reported on Feb. 18 the acquisition of a 100% stake in RTK-Ukraine, a company that owns and operates a fleet of 2,949 grain railcars. The deal’s enterprise value is $64mn, including $49mn cash consideration already paid. Kernel estimates the acquisition will contribute up to $20mn to its annual EBITDA.
The European Bank for Reconstruction and Development (EBRD) and the Clean Technology Fund (CTF) will provide a $56mn package for the construction of four biomass plants in Ukraine by the nation's sunflower oil producer Kernel. The credit package is designed to support renewable energy and technology aimed at reducing carbon intensity. "This will be the second project supported under the Ukraine Agribusiness Waste Residues Window, funded by the CTF," the EBRD said in a statement e-mailed to bne IntelliNews on February 25. Specifically, the funding will support the construction and operation of biomass plants at Kernel’s production facilities in the Kharkiv, Mykolaiv, Odessa and Poltava regions of Ukraine. The plants will jointly generate 338,500 MWh of electricity annually from around 228,000 tonnes of sunflower husks. As part of the investment project Kernel Group is planning to expand specialised agribusiness educational programmes for young people from rural agricultural areas.
68 UKRAINE Country Report March 2019 www.intellinews.com