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kengen's pbt falls by 50% what is not happening
Rank: Veteran Joined: 8/11/2010 Posts: 1,011 Location: nairobi
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thing are nott so rosy at kengen pbt fell from 4.5b to 2.4b, if tax of 1.2b (2.4b for 2008) were charged then the pat would be in the range of 1.2b eps wil be seriously low
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Rank: Elder Joined: 6/2/2008 Posts: 1,438
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I am actually pleasantly surprised by KenGen's results. I expected them to be worse, especially because of the interest on the IFB. I imagine that this has been capitalized.
The reason for the drop in PBT is because revenues were lower.
A statement from the company reads:
"Under the new Power Purchase Agreement regime, our revenues are based on a take or pay capacity availability. This is however adjusted in the event that we are not able to deliver a certain threshold of energy. Due to the poor inflows, the Company was unable to meet this threshold and was consequently adjusted by KPLC by a total of Kshs 1.25 billion."
As for tax charged this will never be consistent for KenGen due to capital allowances (investment deductions) which vary from year to year.
Would I buy? Only if it came to a level where I think I can speculate and exit. I will be a buyer (to keep) only when they complete their major projects and their capital structure gets sorted. There has been talk of Govt selling additional shares and the company hinted at a rights issue in the IM for the IFB.
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Rank: Veteran Joined: 1/7/2010 Posts: 1,279 Location: nbi
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I was disappointed that drought that happened almost 18 months ago affected its revenue by as much as it did (Ksh1.7bn lower-17%). I believe that should imply that that revenue will be higher in the coming financial yr. Only concern is that it seems KenGen has borrowed an additional Ksh31bn in the yr. Ksh25bn is the bond whose financial costs can only rise. The other Ksh6bn is not clear. The Governor of Nyeri - 2017
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Kengen has a huge debt burden and i remember the MD warning us that the EPS and dividends would be on their way down for the next 5 years at least... with that info why would this stock trade at a trailing P/E of 19??? Only Mr. Market knows... Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 6/2/2008 Posts: 1,438
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H1 2010-11 will see a nice increase in operating profits and the PBT(due to better hydrology and hence increased units supplied to KPLC). I am not sure about PAT due to the variability in Taxes. Below 16, I am going to buy to SPECULATE, if it gets there.
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Rank: Elder Joined: 11/27/2007 Posts: 3,604
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The dividends declared still stand at 0.50ksh per share which is rather fair. Price at the bourse is still stable. African parents don't know how to say sorry.. the closest you will get to a sorry is a 'have you eaten'
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Rank: Elder Joined: 7/21/2010 Posts: 6,192 Location: nairobi
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Whatever the dividend,this is a stock to dump for life "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 6/23/2009 Posts: 13,907 Location: nairobi
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16.85 is not a stable price. Hii kitu ilikuwa 18.50 last week! I bliv its a buy for mid/long term at any price below 14.
COOP ABP 15.85; IMH ABP 35.55; KQ ABP 5.75; MTN ABP 5.20
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Rank: Elder Joined: 6/2/2008 Posts: 1,438
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mlennyma wrote:Whatever the dividend,this is a stock to dump for life On the basis of fundamentals, I largely agree with you. This market has however demonstrated that it does not only trade on fundamentals. If I can get in at 16, I think I can be able to exit at 19 before end of January. That will be a return of about 20% in 3-4 months. Risky but doable.
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Rank: Elder Joined: 9/15/2006 Posts: 3,906
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Conclusions: This is a Cost Push Through + Margin Business. It sits at the Cusp of a serious Ramp and Scale Up. Looking ahead, I see a much more muscular Year Ahead. My investment prowess, definitely, cannot muster such a comment, at the moment. The conclusion is from Aly-Khan Satchu.
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Rank: Member Joined: 4/18/2009 Posts: 118
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muganda wrote:Conclusions: This is a Cost Push Through + Margin Business. It sits at the Cusp of a serious Ramp and Scale Up. Looking ahead, I see a much more muscular Year Ahead. My investment prowess, definitely, cannot muster such a comment, at the moment. The conclusion is from Aly-Khan Satchu. Muganda, AKS is a piece of work. Always mighty bullish. Folks on this column owe him a debt of gratitude for the way he is always pushed the case for the bulls. On the other hand Bears would eat him alive.
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Rank: New-farer Joined: 3/3/2010 Posts: 79
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This the kind of stock where you put in any excess cash that you have. As for the short term investors, this is the wrong counter. My goal is extended long term investment >5yrs Knowledge is contagious...Infect truth!
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Rank: Member Joined: 6/28/2007 Posts: 38
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Unless we get another really private private kengen we will never really know what kengen is capable of , at present its used as a sleeping rug or a mat where you wipe your shoes we are holding kengen shares UN PACTUM UN DICTUM
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Rank: Chief Joined: 1/3/2007 Posts: 18,259 Location: Nairobi
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Renegade wrote:muganda wrote:Conclusions: This is a Cost Push Through + Margin Business. It sits at the Cusp of a serious Ramp and Scale Up. Looking ahead, I see a much more muscular Year Ahead. My investment prowess, definitely, cannot muster such a comment, at the moment. The conclusion is from Aly-Khan Satchu. Muganda, AKS is a piece of work. Always mighty bullish. Folks on this column owe him a debt of gratitude for the way he is always pushed the case for the bulls. On the other hand Bears would eat him alive. Wasn't he pushing Safaricom at 6/-? [Well, I guess it made sense at the time until Airtel came in with 3/-] Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 2/10/2007 Posts: 1,587
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@Waithaka,
The drought did not happen 18 months ago but took almost 18 months and ended late last year. It was one of worst droughts in 50 years!
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Rank: Member Joined: 6/14/2010 Posts: 521 Location: Nairobi
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bartum wrote:thing are nott so rosy at kengen pbt fell from 4.5b to 2.4b, if tax of 1.2b (2.4b for 2008) were charged then the pat would be in the range of 1.2b eps wil be seriously low Hey @Bartum where are you getting 50% loss. I beg to differ but business daily reports a 5% drop. Electricity producer, KenGen, has announced a five per cent drop in earnings after poor weather hit its hydro-electric power production, opening way for independent power producers to reap huge profits..... Read further
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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The optimist wrote:Hey @Bartum where are you getting 50% loss. I beg to differ but business daily reports a 5% drop. Electricity producer, KenGen, has announced a five per cent drop in earnings after poor weather hit its hydro-electric power production, opening way for independent power producers to reap huge profits..... Read further @the optimist there is a difference between PAT and PBT... Kengens PBT went down 50% and their PAT went down 5% PBT to me is more important because the tax they pay is not constant.... Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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I think I'd consider buying Kengen @13 before books close to kula that dividend. Dividend of .5 is not too bad @12.5 in the case of Unga but this Unga has no shelf life.
BBI will solve it :)
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Rank: Elder Joined: 6/2/2008 Posts: 1,438
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I have just bought a small chunk at 15.70 and 15.65. I have other bids below these prices and will increase my quantity as it falls. I bet it will not fall below 15.
This is purely for speculation and I have a time frame not exceeding end of January 2011.
I will exit if I can net 10%.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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share is being hammered by the NSE.... i dont know what investors were expecting from this counter.... the highest i can dare buy it is 15 so i hope it gets there... i'll put in an order today at that price... Mark 12:29
Deuteronomy 4:16
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kengen's pbt falls by 50% what is not happening
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