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VituVingiSana
#21 Posted : Friday, June 05, 2009 8:00:00 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,204
Location: Nairobi
The auditors DID highlight the treatment of IAS 39. See other discussions on Fuel Hedge Reserves (or lack thereof... LOL)

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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VituVingiSana
#22 Posted : Friday, June 05, 2009 8:11:00 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,204
Location: Nairobi
I am waiting for the pdf. EABL does the best information dissemination.

* Yep,KQ was screwed. Poor financial advice from their financial advisors.
** They still have 210,000 mt spread over 1.5 years (31 Dec 2010) @ $110
*** Current price of oil is $68 ($50 or so on 31 March 2009)... implying an approx $28mn gain. Whatever good that does...
**** Monitoring by KQ must be done regularly. Bad advice did the rest... If I were CFO,I would have loaded up at $35-40 for current year use as well as a hedge against the hedge.
***** I did suggest that to a senior KQ manager that $37 was unsustainable considering the noises OPEC was making.
****** Rolling hedges are what they do but not for 100%. KQ's financial advisers dropped the ball.

####As regards Naikuni,expect a lot of opposition during the AGM. I miss the former CFO (an experienced hand in the airline business... Neil Canty)

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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stonemimi
#23 Posted : Friday, June 05, 2009 8:14:00 AM
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Joined: 5/16/2009
Posts: 145
4 billion loss and 20% dividend payout does not make sense to me. Back to class now !!!!!!!!!! uuuuuuuuuuuiiiiiiiiiiiii ai fafa

can somebody make me understand???????????


Happiness is not a right - except for children. You won't be happy if you think too much. The search of happiness is one cause os sorrow.
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VituVingiSana
#24 Posted : Friday, June 05, 2009 8:27:00 AM
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The devil is in the details... read the thread from the beginning. And the dividend payout is not 20% (using the 'nominal' value means nothing)

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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Mali
#25 Posted : Friday, June 05, 2009 8:42:00 AM
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Joined: 7/3/2008
Posts: 238
Good day.... so they made 400M? and expect to announce 400% increase in profits next year????LOL....

1. New Management needed.. C Level

2. Truth need be told about this hedging business

3. Is there any political party involved? I understand their main job is to rob as much as they can?

4. What happens if the new constitution is adopted next year? ain't we supposed to go for fresh elections?

if the incompetent and the reckless compete,the result is a disaster.. MN
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harrier
#26 Posted : Friday, June 05, 2009 9:01:00 AM
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Joined: 11/12/2008
Posts: 24
guys we are screwed

according to my understanding about IAS 39 ( treatment of unrealised gains & losses)
it contradicts with hedge in that hedge is a contract to be excuted in future by the parties undersigned. so by this KQ has lost it for this year & next year they need not to beat around the bush by faking it it has happened & the have to abide by the contract.

If you judge people,you have no time to learn.
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kizee
#27 Posted : Friday, June 05, 2009 9:18:00 AM
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Joined: 1/9/2008
Posts: 537
harrier...a hedge is an open position that must be revalued...again revaluation should ideally be done on a daily basis....once again i must sing this song...WHY DIDNT KQ EXIT THIS POSITION WHEN THEY REALISED THEY WERE LOOSING???....OUTRAGEOUS!...
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Mali
#28 Posted : Friday, June 05, 2009 9:19:00 AM
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Posts: 238
What are the actual figures? Capital says 4.1B and Nation puts it at 5.6B?

But again this is KENYA! Proudly!

if the incompetent and the reckless compete,the result is a disaster.. MN
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kizee
#29 Posted : Friday, June 05, 2009 9:28:00 AM
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Posts: 537
the figure is 5.66 billion
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McReggae
#30 Posted : Friday, June 05, 2009 9:32:00 AM
Rank: Elder


Joined: 6/17/2008
Posts: 23,365
Location: Nairobi
kizee....5.66B what????

I got information it was a loss but didn't expect such a huge figure....please confirm!!!!!


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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The General
#31 Posted : Friday, June 05, 2009 9:33:00 AM
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Joined: 6/3/2006
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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
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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
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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
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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
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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
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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
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Joined: 1/3/2007
Posts: 18,204
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
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Joined: 6/17/2008
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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
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Joined: 1/3/2007
Posts: 18,204
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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