Kernel plans to increase DPS to USD 0.42

The board of Ukraine’s largest sunflower oil producer
Kernel (KER PW, KERPW) recommended at its annual general meeting of
shareholders approving a dividend of USD 0.42 per share (68% higher yoy,
implying 3.8% dividend yield) for FY2020, according to a Nov. 10 release. It
also reported the recommended dividend implies a 30% payout ratio. The
company’s AGM will be held on Dec. 10, 2020. Recall, in its annual report
published on Oct. 5, the company said management would recommend USD
0.25 in DPS. 

Andriy Perederey: The recommendation to increase DPS by 68%, despite a quite intensive
CapEx program of USD 270 mln in FY2021 (from USD 252 mln a year before), seems
to be an attempt by management to provide a positive signal to shareholders
about improved board expectations on the company’s mid-term ability to generate
cash flow.