Kernel chairman buys USD 3 mln in shares to widen stake
30 October 2017
Ukraine’s largest sunflower oil producer and grain trader Kernel (KER PW, KERPW) reported on Oct. 27 that on Oct. 23-25, an entity controlled by Board Chairman Andriy Verevskyy acquired a total of 208,917 shares of Kernel stock at an average price of PLN 48.68 per share. The entity, Namsen Limited, thus increased its stake in Kernel to 38.39% from 38.13%, or by 0.26pp.
Dmytro Khoroshun: These shares were acquired after Kernel shares reached their one-year low of PLN 46 per share on Oct. 19 and probably right after the Oct. 23 conference call on the company’s FY2017 results. Thinking mid-term, the company has at least one or two years of hard work ahead. One direction for Kernel’s development is to bring its recently acquired 200,000 ha land bank up to the company’s internal performance standards.
The second direction is making the most of the seemingly inevitable optimization of the Ukrainian sunflower crushing industry. Any gains from improved profitability will not be immediate though. During the Oct. 23 conference call, Verevskyy himself was careful enough not to indicate any specific, detailed EBITDA path from USD 319 mln in FY2017 to USD 500 mln foreseen for FY2021.
In fact, we calculate USD 310 mln as the FY2018 EBITDA for a pessimistic scenario of the USD 51/t bulk sunflower oil FY2018 crushing margin (USD 115/t in FY2016, USD 77/t in FY2017). Nevertheless, the recent lows have proven appealing for insiders such as Verevskyy. We remain bullish on Kernel stock and neutral on its bond.
