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Kenya Re FY 2016 and looking to FY 2017
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Ebenyo
#21 Posted : Friday, March 31, 2017 11:06:07 PM
Rank: Veteran


Joined: 4/4/2016
Posts: 1,997
Location: Kitale
Pesa Nane wrote:
Shak wrote:
@VVS please complete the story and let us know
if there'll be a dividend


First and Final Dividend Kshs. 0.80 (pesa nane, smile )




Book closure and payment dates?
Towards the goal of financial freedom
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Ericsson
#22 Posted : Saturday, April 01, 2017 1:58:17 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
VituVingiSana wrote:
I have had some problems logging on.
I don't know how to "post" docs but @pesanane always comes through!

😂😂😂 @Obiero - No stress. I own a "declining" firm that made more profit on 31st Dec 2016 than KQ made in 4 years! Heck, KenRe's dividend on 1 share is higher than KQ's profits for 4 years! I will cry myself to sleep with a mere 80 cents/share while you celebrate with... zero.

The increase in provisions was +550mn (665mn for 2016) and attributed to West Africa, South Sudan, etc. They will continue pursuing the debtors. The drama in Ivory Coast was cited.

They have lots of cash. T-Bonds are up to 11+bn and bank deposits 4+bn. It remains cash-rich. Modest growth expected in 2017. Marine insurance benefits will kick in in 2017 and hopefully higher profit contribution in 2018.

Expansion in Southern Africa will continue but as with new markets there's always start-up costs including giving credit.

Assets continue increasing. ZepRe is profitable and growing.

Slow but steady. This share/firm isn't for those who love drama.


The Group has no borrowings
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#23 Posted : Saturday, April 01, 2017 6:53:55 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
@Ericsson - Net cash holdings. Huge holdings. In Bonds and Banks. If I had 50% (control), I would sell off the buildings, idle assets, etc... And stick to GoK bonds while running a conservative reinsurance firm.

And extract healthy dividends. I think they need to rethink the dividend policy and look at paying 40% (vs 20%) of EPS as dividends.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#24 Posted : Saturday, April 01, 2017 8:39:14 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
@VVS
There is no need of selling the buildings.They are bringing in good investment income.
The buildings were also build a while back so by now they have recovered their return on investment.
They also have good assets like 30 acres in Nairobi like 2 acres in Upper hill opposite Don Bosco church.
These are gold assets which they can develop to bring in better returns.
Main worry currently is if they decide to put up a commercial building in Upper Hill with the current glut being experienced in the area
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Ericsson
#25 Posted : Saturday, April 01, 2017 8:40:44 PM
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Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
As for dividends their policy is to give out 35% of the cash profits.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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obiero
#26 Posted : Saturday, April 01, 2017 10:01:57 PM
Rank: Elder


Joined: 6/23/2009
Posts: 13,532
Location: nairobi
Ericsson wrote:
@VVS
There is no need of selling the buildings.They are bringing in good investment income.
The buildings were also build a while back so by now they have recovered their return on investment.
They also have good assets like 30 acres in Nairobi like 2 acres in Upper hill opposite Don Bosco church.
These are gold assets which they can develop to bring in better returns.
Main worry currently is if they decide to put up a commercial building in Upper Hill with the current glut being experienced in the area

2 acres Upper Hill???

HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Ericsson
#27 Posted : Sunday, April 02, 2017 8:23:54 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
Yes Obiero
The plot size is between 1.5-2 acres
The plan was to put up twin towers commercial building of around 21 floors each
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#28 Posted : Sunday, April 02, 2017 10:25:56 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Ericsson wrote:
@VVS
There is no need of selling the buildings.They are bringing in good investment income.
The buildings were also build a while back so by now they have recovered their return on investment.
They also have good assets like 30 acres in Nairobi like 2 acres in Upper hill opposite Don Bosco church.
These are gold assets which they can develop to bring in better returns.
Main worry currently is if they decide to put up a commercial building in Upper Hill with the current glut being experienced in the area

They have been looking at a new building, I just didn't know where in UH.
I agree with you re: glut of office space. What's the value of land in UH?
Where are the 30 acres?
I look at current yields regardless of cost. GoK bonds yielding tax-free 13% should be snapped in droves. That's almost 2x rental yields on a PBT basis.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Horton
#29 Posted : Sunday, April 02, 2017 10:27:33 AM
Rank: Veteran


Joined: 8/30/2007
Posts: 1,558
Location: Nairobi
Anyone got a balance sheet on this @pesanane?
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Ericsson
#30 Posted : Sunday, April 02, 2017 4:54:27 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
VituVingiSana wrote:
Ericsson wrote:
@VVS
There is no need of selling the buildings.They are bringing in good investment income.
The buildings were also build a while back so by now they have recovered their return on investment.
They also have good assets like 30 acres in Nairobi like 2 acres in Upper hill opposite Don Bosco church.
These are gold assets which they can develop to bring in better returns.
Main worry currently is if they decide to put up a commercial building in Upper Hill with the current glut being experienced in the area

They have been looking at a new building, I just didn't know where in UH.
I agree with you re: glut of office space. What's the value of land in UH?
Where are the 30 acres?
I look at current yields regardless of cost. GoK bonds yielding tax-free 13% should be snapped in droves. That's almost 2x rental yields on a PBT basis.


The 30 acres is along ngong road just before you reach Nairobi business park.
Value of the land in UH should be close to a bn
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Pesa Nane
#31 Posted : Sunday, April 02, 2017 10:08:18 PM
Rank: Elder


Joined: 5/25/2012
Posts: 4,105
Location: 08c
Horton wrote:
Anyone got a balance sheet on this @pesanane?

Find the comprehensive FY16 Annual Report HERE
Pesa Nane plans to be shilingi when he grows up.
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VituVingiSana
#32 Posted : Sunday, April 02, 2017 11:25:50 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Ericsson wrote:
VituVingiSana wrote:
Ericsson wrote:
@VVS
There is no need of selling the buildings.They are bringing in good investment income.
The buildings were also build a while back so by now they have recovered their return on investment.
They also have good assets like 30 acres in Nairobi like 2 acres in Upper hill opposite Don Bosco church.
These are gold assets which they can develop to bring in better returns.
Main worry currently is if they decide to put up a commercial building in Upper Hill with the current glut being experienced in the area

They have been looking at a new building, I just didn't know where in UH.
I agree with you re: glut of office space. What's the value of land in UH?
Where are the 30 acres?
I look at current yields regardless of cost. GoK bonds yielding tax-free 13% should be snapped in droves. That's almost 2x rental yields on a PBT basis.


The 30 acres is along ngong road just before you reach Nairobi business park.
Value of the land in UH should be close to a bn

Wow! I need to check to see what value has been shown on the books. Ngong land - is there clear title? You know the drama they had with land in Ngong/Karura/City Forest! Say it's clear title, what's the 30 acres worth?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#33 Posted : Monday, April 03, 2017 12:16:16 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Hmmm, KenyaRe should sell off one of its buildings in Upper Hill to EACC/DPP. Then use the cash to build the 21 story tower on the 2 acres opposite Don Bosco when the market looks better. In the meantime the cash can be placed in a T-bond for 2-5 years.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#34 Posted : Monday, April 03, 2017 12:53:16 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
VituVingiSana wrote:
Hmmm, KenyaRe should sell off one of its buildings in Upper Hill to EACC/DPP. Then use the cash to build the 21 story tower on the 2 acres opposite Don Bosco when the market looks better. In the meantime the cash can be placed in a T-bond for 2-5 years.


No need to sell the building.Currently it has 100% occupancy.
Money to build the twin towers has already been set aside.Its about sh.4.2bn.
Currently it has been put into government securities to earn interest as they wait for the right time
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Pesa Nane
#35 Posted : Monday, April 03, 2017 10:41:49 AM
Rank: Elder


Joined: 5/25/2012
Posts: 4,105
Location: 08c
VituVingiSana wrote:
Hmmm, KenyaRe should sell off one of its buildings in Upper Hill to EACC/DPP. Then use the cash to build the 21 story tower on the 2 acres opposite Don Bosco when the market looks better. In the meantime the cash can be placed in a T-bond for 2-5 years.

Ohh, so that is Kenya Re land? There are some "masais" making a killing leasing parking space to church goers and NTSA visitors.
Pesa Nane plans to be shilingi when he grows up.
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Elephant Man
#36 Posted : Monday, April 03, 2017 10:48:45 AM
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Joined: 12/24/2008
Posts: 112
@ pesa nane... the next thing you know, those 'masais' will claim ownership on the basis of adverse possession...lol
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VituVingiSana
#37 Posted : Monday, April 03, 2017 11:07:01 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Ericsson wrote:
VituVingiSana wrote:
Hmmm, KenyaRe should sell off one of its buildings in Upper Hill to EACC/DPP. Then use the cash to build the 21 story tower on the 2 acres opposite Don Bosco when the market looks better. In the meantime the cash can be placed in a T-bond for 2-5 years.


No need to sell the building.Currently it has 100% occupancy.
Money to build the twin towers has already been set aside.Its about sh.4.2bn.
Currently it has been put into government securities to earn interest as they wait for the right time

I am not a fan of "property" for the sake of owning property when there are other asset classes OR the ability to own property through alternate means.

If the UH building is worth [or there's an offer] 1bn at a 8% Gross/Pre-tax Rental Yield, I'd rather sell the building and re-invest the cash into Car & General. C&G owns lots of property along Lusaka Road plus has a decent but not spectacular business that generates post-tax Earnings Yield of 8%.

I like tax-free T-Bonds at 13% [12 years] as well. That's 17% pre-tax which is 2x the Rental Yield. Unless the building increases in value at 8% p.a., the Bond is clearly superior [less hassle, admin, etc].

Or KenRe should cut a deal with EABL/BAT/credit-worthy tenant to buy a plant/land/building as a Sale-Leaseback at a return better than 12%. Recently EABL borrowed at 14.17% p.a. for 5 years.

Bottomline: Can other options (as listed above) beat KenRe's after-tax rental returns?

P.S. About the 30 acres. Value?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#38 Posted : Monday, April 03, 2017 11:45:24 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
Pesa Nane wrote:
VituVingiSana wrote:
Hmmm, KenyaRe should sell off one of its buildings in Upper Hill to EACC/DPP. Then use the cash to build the 21 story tower on the 2 acres opposite Don Bosco when the market looks better. In the meantime the cash can be placed in a T-bond for 2-5 years.

Ohh, so that is Kenya Re land? There are some "masais" making a killing leasing parking space to church goers and NTSA visitors.


Their plot of land is not the one church goers and NTSA visitors park.
Theirs is the one in between Taj Towers and the one church goers park.
There was even a beware notice placed
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Ericsson
#39 Posted : Monday, April 03, 2017 11:48:15 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Hmmm, KenyaRe should sell off one of its buildings in Upper Hill to EACC/DPP. Then use the cash to build the 21 story tower on the 2 acres opposite Don Bosco when the market looks better. In the meantime the cash can be placed in a T-bond for 2-5 years.


No need to sell the building.Currently it has 100% occupancy.
Money to build the twin towers has already been set aside.Its about sh.4.2bn.
Currently it has been put into government securities to earn interest as they wait for the right time

I am not a fan of "property" for the sake of owning property when there are other asset classes OR the ability to own property through alternate means.

If the UH building is worth [or there's an offer] 1bn at a 8% Gross/Pre-tax Rental Yield, I'd rather sell the building and re-invest the cash into Car & General. C&G owns lots of property along Lusaka Road plus has a decent but not spectacular business that generates post-tax Earnings Yield of 8%.

I like tax-free T-Bonds at 13% [12 years] as well. That's 17% pre-tax which is 2x the Rental Yield. Unless the building increases in value at 8% p.a., the Bond is clearly superior [less hassle, admin, etc].

Or KenRe should cut a deal with EABL/BAT/credit-worthy tenant to buy a plant/land/building as a Sale-Leaseback at a return better than 12%. Recently EABL borrowed at 14.17% p.a. for 5 years.

Bottomline: Can other options (as listed above) beat KenRe's after-tax rental returns?

P.S. About the 30 acres. Value?


Better they own the building and rent it out to tenants.
Companies like EABL which sold their building was due to cashflow issues and wanting to inflate profits in the short term.
Worldwide Insurance companies and pension schemes are known to own buildings and properties coz of returns that supplement the main business
Wealth is built through a relatively simple equation
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Ericsson
#40 Posted : Thursday, April 06, 2017 7:26:58 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
Catch Mr Jadiah Mwarania, MD Kenya_Re on the TradingBell tonight at 9:30pm on KBCChannel1 as he talks about the opportunities & challenges facing insurance business in Kenya.
Wealth is built through a relatively simple equation
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