And it can only keep growing

i have a feeling that the results will be more than splendid this year. bonus shares will be in order. hope the structuring will be small-shareholder friendly.

I will be surprised if at all KPLC gives bonus shares with these results. This is due to the impending conversion of preference shares and the rights issue thereafter. That I believe is already too much for a company that has demonstrated how slow it can be with such changes!

All the same, I expect good results but not in the mould of the fantastic ones being posted by banks. Electricity demand (and indeed supply) does not and has not increased that dramatically. A doubling of KPLC's H1 2009-10 profits would yield 3.746 B PAT for the full year, which would be a 16% increase.

Considering that there was rationing in H1 2009-10, the more likely scenario is H2 2010 contributing 55%+ of Full Year profits (like in 2008-09) which would bring in PAT at 4.16 B - 29% increase. This would result to an EPS of a whopping Kshs 52.60 and a dividend of Kshs 10 or better.

It's of course possible for them to do better (e.g. by H2 profits coming in at 60% of total)but I prefer to err on the side of caution. Remember that part of the reason for the big increase in profits for 2008-09 was the result of an increase in tariffs.

@mwanahisa i would like to disagree with you on a couple of things....

First of all if you double KPLC's H1 earnings you'll get 4billion net profit...

Secondly i watched another immediately after they announced last years full results and everyone was saying it was because of a rise in tariffs. Then i ask How they managed to pull off a 30% increase in H1 2010... The answer being cost efficient and rising revenues with economic growth improvement..

Thirdly i expect their other comprehensive income to grow substantially...

So i expect a 6billion PBT come october

Since i'm already up on my holdings substantially I've got all the patience in the world...

A 1:1 conversion and nobody will ever smile here...Pray...

@g267. KPLC H1 2010 PAT stood at Kshs 1.873 B. Doubling that comes to Kshs 3.746 B. The increase in H1 2010 profits was 27.85%. The increase in 2009 Full Year results was a MASSIVE 82.72 %. You can see why the increase was attributed to tariff increases.

However as stated above, I expect H2 2010 results to come in better than the first Half, but certainly not anywhere near last year's increase.

@ The Deal. You appear to have chosen to ignore the many posts on the topic of conversion, so let me weigh in as well.

KPLC has Kshs 15,899,000,000 worth of preference shares in its books (ignoring the other older preference shares). 87% of these shares = Kshs 13,882,130,000. It is this value in Kshs that is to be converted into ordinary shares. The practice has been to use the weighted average market price for say the 6 months period before the application to the CMA for the conversion or publication of the intention to convert. Pundits can correct me on this.

I believe the price for the last 6 months has been ranging from 170 - 210. At Kshs 170, which, is the lower end of the range the new shares would be 81,365,470. If however, the conversion ratio was set at Kshs 190 the government would only get 72,800,684 additional ordinary shares meaning conversion would actually be lower than 1:1.

A 1:1 conversion ratio would certainly not be any cause for alarm as the shares would only just double. Mind you, many of us believe that KPLC should first revalue all their assets before conversion since their assets are currently undervalued which could result in a more equitable conversion ratio perhaps to the extent of govt getting less than 50% of current ordinary shares. This scenario is however unlikely as Govt calls the shots at KPLC.

Even if we extend the argument and include the proposed rights issue shares (touted at Kshs 10 billion in various quarters), it is clear that the current KPLC share price appears to have discounted all that. True, in the short run, the price may fall, but for many of us, that would only provide us the opportunity to get MORE of a value share at GREAT price.

@vvs how can they convert at 300 if it hasnt traded at that price

Yap...should close @ 210