Kernel made 2 acquisitions for approx. USD 44.2 million, estimates investment needs at USD 50 million

Kernel Holding acquired assets used for transhipment of vegetable oils at the port of Chornomorsk for USD 19.4 million and signed an agreement to acquire 100% rights in the transhipment terminal of Reni-Oil LLC for USD 24.75 million to improve its oilseeds processing business, which was recently the main driver of the Group’s profits, the company said. In addition, the Group estimates the need for capital expenditures in the amount of approximately USD 50 million.

“To improve the resilience of its oilseed processing business, which has recently been a major driver of Group profits, the Group:

  • purchased assets used for transshipment of vegetable oils in the port of Chornomorsk for USD 19.4 million. The transaction is subject to approval by antitrust authorities in Ukraine. In the event that Ukraine’s Black Sea ports remain blocked, the Group intends to use these assets as an important storage and transshipment hub to receive sunflower oil by rail, store it in a warehouse, and then redirect the sunflower oil by truck to the Danube port, thus reducing logistics costs alternative export route. One-time storage of sunflower oil in the amount of 105 thousand. tonnes allows the Group not to hold up pressing plants during transport disruptions, as much as it did in 2022-2023, and to streamline logistics. If the Ukrainian Black Sea ports are unblocked, these assets will be used as the main deep-water transhipment base in the Black Sea for sunflower oil exported by the Group;
  • concluded an agreement to acquire 100% of corporate rights in Reni-Oil LLC, a sunflower oil handling terminal with a capacity of 15 thousand. tons of one-time storage of sunflower oil in the port of Reni for USD 24.75 million. It is the only terminal with adequate reception, storage and unloading capabilities among the Ukrainian ports on the Danube, enabling the export of sunflower oil even in the event of blockade of the Black Sea ports. The deal is expected to be finalized by December 31, 2023.” – we read in the message.

The company said the Group’s increased edible oil infrastructure is critical ahead of the launch of the Group’s brand new mill in the Khmelnytsky region of Ukraine, which is scheduled for spring 2024. This plant will allow the processing of up to 1 million tonnes of sunflower seeds per year. “Out of $279 million in total investment, $40 million remains to be used,” the release said.

As at July 31, 2023, the Group had USD 1.445 billion of interest-bearing debt (excluding interest and lease liabilities), USD 1.148 billion in cash and cash equivalents and USD 327 million in inventories of goods (including 1,282 thousand tons of cereals, 103 oilseeds 147,000 tonnes of sunflower oil and 111,000 tonnes of sunflower meal).

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Kernel Holding is a food producer operating in Ukraine. It has been listed on the Warsaw Stock Exchange since 2007.

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