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KenolKobil FY 2012 substrata loss of 9b!
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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So I'm winning....
Projected EPS for FY 13 is KES2
DPS KES0.5
Payout ratio 25%
DY @ 10.20 is 4.9%
Assume exit PE of 10 vs current Market PE of 11.7
Therefore target Price: 10X2=KES20
Upside: 96%
Rating: Strong BUY
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Rank: Member Joined: 2/8/2007 Posts: 808
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KK margin's are thin, reminiscent of most utility companies and retail companies operating in organized markets. KK being a utility company has natural protection from ERC in a way provided it can maintain its market share. Obviously 2012 murphy's law applied in KK. Whatever could go wrong went wrong. Sales decline, Hedge losses, cost pressure, margin erosion and a monumental loss. The mere fact that KK survived all this and has not come back to shareholders for funding is strong testimony of the company's strength. Even good old KCB can not withstand a 9B loss without requesting for a shareholder bailout. CERTAINLY KK will bounce back this year. The beauty of their case is that due to their high operational leverage if they avoid the hedges and contain costs they easily turn in a decent profit.
I know of a certain company on NSE which is likely to report worse results than KK in a few months time and this one will require a bailout immediately thereafter.
One certain pattern I have picked is that oil companies seem to get a whacking in election years. Pricing and ullage issues crop up in election years and these end up disorganizing oil companies.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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@kausha. I think it will be KQ. The only problem is last year, they had the hugest cash call in history. Imagine them coming again for a bail out?? The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 1/3/2007 Posts: 18,361 Location: Nairobi
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mwekez@ji wrote:the deal wrote:mwekez@ji wrote:VituVingiSana wrote: What's the ROE & ROA?
All are currently negative. The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 and worse my analysis tells me that KK NBV is quite low What analysis is this???? when KK assets are carried at historic cost!!! The ROE & ROA are in the negative and it would never change even if the assets were not carried at historic cost!!! ... You young boy have a lot to learn. .... You also fail to answer the important questions (like Post 64) and then you come yapping. what an immature character you are LOL. Well @thedeal does have a point as does @mwekezaji. 1) The ROE & ROA are negative for 2012. That's a fact. 2) The NAV/share is positive (KES 4.57) but some (not all) assets (land & buildings) are carried at historic cost. KK has been around since 1957 & has acquired assets over many years. Some assets may be carried at a fraction of the real value. 3) I have a feeling that the sale of the 'under-performing' or 'excess' assets may yield an excellent gain. Nevertheless, this is a one-time gain. 4) Will the assets be sold in 2013? 2014? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,361 Location: Nairobi
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the deal wrote:So I'm winning....
Projected EPS for FY 13 is KES2
DPS KES0.5
Payout ratio 25%
DY @ 10.20 is 4.9%
Assume exit PE of 10 vs current Market PE of 11.7
Therefore target Price: 10X2=KES20
Upside: 96%
Rating: Strong BUY
I agree but the OPERATIONAL PAT will not be KES 2 but a lower number. There will be probably be a decent EPS boost from the sale of assets (land) if done in 2013 as indicated in the Press Release. Good news: Lower interest rates in 2013 vs 2012. Lower debt levels in 2013 vs 2012. And a possible sale in 2014 OR a strategic investor. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,361 Location: Nairobi
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Kausha wrote:KK margin's are thin, reminiscent of most utility companies and retail companies operating in organized markets. KK being a utility company has natural protection from ERC in a way provided it can maintain its market share. Obviously 2012 murphy's law applied in KK. Whatever could go wrong went wrong. Sales decline, Hedge losses, cost pressure, margin erosion and a monumental loss. The mere fact that KK survived all this and has not come back to shareholders for funding is strong testimony of the company's strength. Even good old KCB can not withstand a 9B loss without requesting for a shareholder bailout. CERTAINLY KK will bounce back this year. The beauty of their case is that due to their high operational leverage if they avoid the hedges and contain costs they easily turn in a decent profit.
I know of a certain company on NSE which is likely to report worse results than KK in a few months time and this one will require a bailout immediately thereafter.
One certain pattern I have picked is that oil companies seem to get a whacking in election years. Pricing and ullage issues crop up in election years and these end up disorganizing oil companies. Politics in 2012. Pressure on ERC from 'politicos' to cap rate increases for KPLC & KK. And the firm in question is ... KQ  Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 1/3/2007 Posts: 18,361 Location: Nairobi
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Aguytrying wrote:mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. Apparently, George Wachira was the GM of PIEA (the industry watchdog) & was replaced at KK's behest after the Triton scam. I think PIEA is in charge of ullage allocation. He was a director of KPC when the Triton scam happened & this prompted Total (which lost KES 100mn+) & KK to ask the entire board to resign. GW lost his cushy job as a KPC director. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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VituVingiSana wrote:Aguytrying wrote:mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. Apparently, George Wachira was the GM of PIEA (the industry watchdog) & was replaced at KK's behest after the Triton scam. I think PIEA is in charge of ullage allocation. He was a director of KPC when the Triton scam happened & this prompted Total (which lost KES 100mn+) & KK to ask the entire board to resign. GW lost his cushy job as a KPC director. Now the tone of his article makes sense. I didn't know all this and i could tell. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Aguytrying wrote:VituVingiSana wrote:Aguytrying wrote:mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. Apparently, George Wachira was the GM of PIEA (the industry watchdog) & was replaced at KK's behest after the Triton scam. I think PIEA is in charge of ullage allocation. He was a director of KPC when the Triton scam happened & this prompted Total (which lost KES 100mn+) & KK to ask the entire board to resign. GW lost his cushy job as a KPC director. Now the tone of his article makes sense. I didn't know all this and i could tell. Kumbe! The guy is BD's go to guy when it comes to oil matters... GOD BLESS YOUR LIFE
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KenolKobil FY 2012 substrata loss of 9b!
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