Kernel - On Track for a Bumper Year
After prices surged 155% in a year, for 2021 Ukrainian sunflower growers are reportedly planning to increase the planting area to a record 7 million hectares. This suggests an equally record-breaking harvest that should improve the supply of sunflower seeds to Kernel’s crushing plants, most likely resulting in strong crush margins. At the same time, Ukraine is forecasting that its 2021 harvest of major grain crops could be in the ballpark of 75 million tonnes—the same as the record crop of 2019. Cereal prices have been on an upward curve, and Kernel wants to capitalize on this by hedging future sales of its planned crops, with sales profits on 75% of the expected volume set to be locked in by the end of March. Based on this, we believe Kernel can maintain EBITDA from the farming business above $200m in FY2021/22. Kernel smashed expectations with its financial results for the first half of FY2021, ended 31 December 2020, and to reflect this we are raising our full-year EBITDA estimate from $550m to $660m. As it powers towards record earnings, with capital expense set to drop after 2021, we are convinced Kernel will increase shareholder distributions from fiscal FY2022 to $0.80 per share, and hike DPS even more to $1.17 in FY2023. We raise our target price for Kernel from PLN 62.93 to PLN 71.84 and we maintain our buy call on the Ukrainian farmer.
Kernel Holding is a holding company. Co.'s is a diversified agribusiness engaged in the production and sale of bottled sunflower oil (sold under brand names Schedry Dar, Stozhar and Chumak Zolota), the production and subsequent export of bulk sunflower oil and meal, the wholesale trade of grain (mainly wheat, barley and corn), farming, and the provision of logistics and transshipment services n the ports of Ilyichevsk, Taman and Mykolaiv. The majority of Co.'s manufacturing facilities are primarily based in Ukraine and Russia. In addition, Co. is a private provider of inland silo services in Ukraine.
Set up in 1986, mBank (originally BRE – Export Development Bank) is Poland’s 4th largest universal banking group in terms of total assets and 5th by net loans and deposits at the end of June 2019. mBank has one of the oldest brokerages in Poland – we have been providing brokerage services since 1991 - and the biggest, serving about 300 ths clients.
We provide all brokerage services available in the Polish capital market (i.e. Warsaw Stock Exchange, non-public markets and forex) in a way that meets the expectations of all groups of investors, both individual and institutional. Participating in the dynamic growth of the Polish capital market since its inception, we have acquired competences and experience needed to provide the highest quality of service and we have won the trust and satisfaction of our Clients.
Over the past decade, mBank's Equity Research Team has been consistently ranked among the top research teams in Parkiet's annual institutional investor surveys (Parkiet is Poland's leading daily business newspaper). mBank analysts provide coverage on an extensive list of companies, mainly in Poland but also elsewhere in the CEE region: Austria, Czechia, Portugal, Ukraine and Hungary.
Clients get access to a comprehensive selection of research products including daily market insights, monthly roundups, macroeconomic views, industry- and company- specific analyses, investing strategies, earnings comments, etc.
We give our institutional clients numerous opportunities to connect with industry professionals, top executives, and leading analysts:
- Get direct access to senior management teams at listed companies (over 30 meetings in 2018),
- Engage in our many industry events, featuring listed Polish and global firms (in 2018, we hosted sector-themed conferences around industrials, chemical companies, telecoms, retail, and financials, and co-hosted a Best of Poland investors' with Commerzbank and the Warsaw Stock Exchange),
- Stay informed through an array of enlightening discussion panels, workshops, and briefing sessions with regulatory officials.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.