KK has a case pending vs KPC. Too bad it has been delayed in the courts. A win would mitigate the loss occasioned by the forex losses!

And losing the kpc case would bleed its a*s to death.

Most fx hedges that I have seen are for periods of 1, 3,6 or 12 months.

Segman entered into this contracts around August of last year with cash settlements due this half year period.

As a cash flow tool fx hedges have significant upside or downside risk. As a business which makes all payments in USD it is imperative that you have a good understanding of these risks. Their loss shows that they hedged more than 60% of their oil cost requirements.

My 2 cents is that FY 2012 will be a loss.

No, coz not booked as a profit anywhere.

As part of defence mechanisms, management will always cite international economy, prevailing market conditions, etc for their inefficiencies. Clearly we should not analyse their perfomance by what they say. Capture this;


Cost of sales to Sales ratio 98% (2011) 93% (COS went up in 2012. Why?)
Gross profit to Income ratio 2% (2011) 7%
Growth in sales 25% (2011) 35% (with all the supa sundays campaigns?)
Efficiency ratio b4 exch losses 102% (2011)23% - using gross profit as net income. (Costs?)
Exchange losses to sales 4% (2011) 1%

So, my conclusion is that so many things went wrong in the half year not just hedging. Mr. Jacob Segman, please explain in more clear details that you are not the one running KK down because you already has an offer from PUMA when the buying price is heavily and mercilessly discounted?