Kernel to increase land bank by 60,000 ha

Ukraine’s Anti-Monopoly Committee announced on March 17 that it has granted permission to leading Ukrainian sunflower oil producer Kernel (KER PW, KER PW) to purchase 10 farms located in central Ukraine from Swiss international commodity trader Glencore (GLEN LN).

Recall, Kernel officials talked about their firm’s plans to expand its land bank by 150,000 ha and negotiations on the possible purchase of assets of Ukrainian agricultural holding Mriya. Kernel’s current land bank amounts to about 385,000 ha.

Igor Zholonkivskyi: We estimate that Kernel’s land bank will increase by about 60,000 ha once the purchase is finalized. This can potentially add up to USD 20 mln to EBITDA (its FY2016 EBITDA stood at USD 358 mln). The boosted land bank is positive for Kernel, but it was expected and has been probably mostly discounted by the market.