Fitch affirms Kernel’s rating ‘B’
2012-02-15 15:48:15
The Fitch Ratings agency has affirmed Luxembourg- based Kernel Holding S.A. Long-term foreign and local currency Issuer Default Ratings (IDRs) of 'B' and 'B+', respectively. This was reported by the agency. Fitch has also affirmed Kernel’s National Long- term rating of 'AA+'(ukr). The Outlooks for the Long-term IDRs and National Long-term rating are Stable.
The agency’s experts believe Kernel’s local currency IDR remains constrained by the group’s M&A appetite, by event-risks linked to its dependence mostly on Ukrainian suppliers and to its exposure to the Ukrainian government, which has a track record of introducing export restrictions or levies to the farming sector to address its perennial budget deficits. This has translated into large volatility in sales and profits for entities in the sector, as Kernel has shown in the Q112 results for its grain segment.
In general, Fitch analysts point out Kernel’s leadership positions in fairly consolidated industries of operations, high degree of vertical integration, its conservative approach to managing price risk and adequate matching between debt and sales/profits by currency. Additionally, the group’s moderate financial leverage and strong liquidity backed up by an improvement in the debt maturity profile also supports the current ratings.