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KQ 2008-9 Results
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The General
#31 Posted : Friday, June 05, 2009 9:33:00 AM
Rank: Member

Joined: 6/3/2006
Posts: 553

http://www.capitalfm.co....sts-Sh4b-loss-2366.html

The thicker the thigh the sweeter the pie.
The thicker the thigh the sweeter the pie.
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kizee
#32 Posted : Friday, June 05, 2009 9:33:00 AM
Rank: Member

Joined: 1/9/2008
Posts: 537
pickin the figure from reuters...dunno how to paste the story here..i wud if i cud
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The General
#33 Posted : Friday, June 05, 2009 9:47:00 AM
Rank: Member

Joined: 6/3/2006
Posts: 553

http://www.reuters.com/a...ines/idUSL5825720090605

The thicker the thigh the sweeter the pie.
The thicker the thigh the sweeter the pie.
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stockyt
#34 Posted : Friday, June 05, 2009 9:50:00 AM
Rank: Member

Joined: 9/15/2006
Posts: 41
i think in a nutshell,PAT loss of 4B............dont remember profit warning having prepared us in the least for this magnitude
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Mainat
#35 Posted : Friday, June 05, 2009 9:54:00 AM
Rank: Veteran

Joined: 11/21/2006
Posts: 1,590
Erm,VV,I think you&rsquo;ve misunderstood the KQ hedge. Assuming what you say about it being a certain amount of litres at $120 until December 2010,what KQ has here is a fixed-term price-hedge. This type of hedge (it has a more technical name),says KQ will get that amount of oil at $120 from now until Dec 2010. What this means is that all the oil KQ has committed to buy at this price will be at a loss if oil prices stay below $120. One can then see why the loss is coming from.



A 6-monthly rolling hedging strategy (again there is a more technical term),would allow KQ to take a hedge based on its view of where oil prices are heading and thus would for example have meant it could have done a huge hedge at the recent oil price lows&hellip;


www.mjengakenya.blogspot.com
Sehemu ndio nyumba
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Gordon Gekko
#36 Posted : Friday, June 05, 2009 10:04:00 AM
Rank: Elder

Joined: 5/27/2008
Posts: 3,760
Will someone tell me what that Branson guy is doing right so I can ask for TN's job and do it?
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miser
#37 Posted : Friday, June 05, 2009 10:35:00 AM
Rank: Member

Joined: 7/7/2008
Posts: 124
Suppose the oil prices never fell.Would it have been loss to KQ?I guess not! No wonder they can afford to pay dividends.....but for how long?

Share ideas for a better Kenya!!
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VituVingiSana
#38 Posted : Friday, June 05, 2009 10:44:00 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
Nope,I have NOT misunderstood the hedge. KQ has entered into FORWARD CONTRACTS (at various strike prices & dates)... Since the contract prices AVERAGE $120 or so... they take a loss IF prices fall below $120/bbl since KQ has to pay the counterparties the difference.

*** Since KQ has to MARK-TO-MARKET as of the reporting date (31 March 2009),they would have taken a huge provision since the MARKET PRICE was around $50/bbl. The higher the oil price the lower the loss on the fuel hedge.

*** What did you assume I misunderstood?

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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McReggae
#39 Posted : Friday, June 05, 2009 10:50:00 AM
Rank: Elder

Joined: 6/17/2008
Posts: 23,365
Location: Nairobi
VVS,

Where did you get the Kshs. 1B profit,you posted earlier!!!!









The chief value of money lies in the fact that one lives in a world in which it is overestimated.
..."Wewe ni mtu mdogo sana....na mwenye amekuandika pia ni mtu mdogo sana!".
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VituVingiSana
#40 Posted : Friday, June 05, 2009 10:52:00 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
@miser - Keep in mind that KQ also buys the unhedged portion at lower prices. KQ has the cash to pay off the current hedges even with the dividend payouts as long as the core business generates cash. Which it did in 2008-9.

*** I wish KQ would post the Balance Sheet online.

*** The price is at 19 but I expect a slow rebound to 20 (sort of what happened to Total)

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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