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Kenya Re HY16
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Pesa Nane
#1 Posted : Monday, August 29, 2016 8:34:10 PM
Rank: Elder


Joined: 5/25/2012
Posts: 4,105
Location: 08c
Pesa Nane plans to be shilingi when he grows up.
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guru267
#2 Posted : Monday, August 29, 2016 9:17:43 PM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
Pesa Nane wrote:


EPS up.. in this economy thats alright Applause
Mark 12:29
Deuteronomy 4:16
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VituVingiSana
#3 Posted : Monday, August 29, 2016 10:51:34 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Applause Applause Applause @VVS is pleased. It has been a tough 6 months but KenRe has performed well. Drool Drool Drool
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kaimbaga2012
#4 Posted : Tuesday, August 30, 2016 9:46:46 AM
Rank: New-farer


Joined: 10/25/2011
Posts: 67
guru267 wrote:
Pesa Nane wrote:


EPS up.. in this economy thats alright Applause



I don't get it how Total Comprehensive income is down but E.P.S is up. Somebody kindly explain this to me
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guru267
#5 Posted : Tuesday, August 30, 2016 10:23:04 AM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
kaimbaga2012 wrote:
guru267 wrote:
Pesa Nane wrote:


EPS up.. in this economy thats alright Applause



I don't get it how Total Comprehensive income is down but E.P.S is up. Somebody kindly explain this to me


EPS looks at only the P&L.

TCI includes NSE losses.
Mark 12:29
Deuteronomy 4:16
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kaimbaga2012
#6 Posted : Tuesday, August 30, 2016 10:39:26 AM
Rank: New-farer


Joined: 10/25/2011
Posts: 67
guru267 wrote:
kaimbaga2012 wrote:
guru267 wrote:
Pesa Nane wrote:


EPS up.. in this economy thats alright Applause



I don't get it how Total Comprehensive income is down but E.P.S is up. Somebody kindly explain this to me


EPS looks at only the P&L.

TCI includes NSE losses.



Thanks Guru267
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Ericsson
#7 Posted : Tuesday, August 30, 2016 3:07:35 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
LONG LIVE KENYA RE
Share price behaving appropriately today
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Ericsson
#8 Posted : Tuesday, August 30, 2016 4:40:59 PM
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Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
It's losses in the NSE is about sh.239mn which is unrealised coz the portfolio hasn't been liquidated.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#9 Posted : Tuesday, August 30, 2016 8:54:01 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Ericsson wrote:
It's losses in the NSE is about sh.239mn which is unrealised coz the portfolio hasn't been liquidated.


- Kenya Re has sold some shares in 1H [Investor Briefing] but IMHO not enough. Now they are looking at loading up.
- Preference was given to T-Bonds and T-Bills esp in Oct 2015 and the benefits are seen in 2015.
- Plans are being made for a new office building but likely to break ground in 2017 at the earliest.
- Currently the properties are leased out with 97% occupancy.
- No money in Chase/Imperial.
- 1H 2016 had large payouts for the Nepal earthquake. These have almost ended.
- Zep Re is critical for KenRe to expand (via Zep Re) into Africa.
- KenRe is doing OK in Zambia [for Southern Africa] and in Abidjan. There are challenges eg currency, competition, etc.
- Current ratings by GCR and AM Best are good.
- Lots of cash, bank deposits and Gov't securities.
- Property "valuation gains" [if any] will come through in 2H.

@VVS is content with Mwarania and team. Applause Applause Applause
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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sparkly
#10 Posted : Tuesday, August 30, 2016 11:03:06 PM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
VituVingiSana wrote:
Ericsson wrote:
It's losses in the NSE is about sh.239mn which is unrealised coz the portfolio hasn't been liquidated.


- Kenya Re has sold some shares in 1H [Investor Briefing] but IMHO not enough. Now they are looking at loading up.
- Preference was given to T-Bonds and T-Bills esp in Oct 2015 and the benefits are seen in 2015.
- Plans are being made for a new office building but likely to break ground in 2017 at the earliest.
- Currently the properties are leased out with 97% occupancy.
- No money in Chase/Imperial.
- 1H 2016 had large payouts for the Nepal earthquake. These have almost ended.
- Zep Re is critical for KenRe to expand (via Zep Re) into Africa.
- KenRe is doing OK in Zambia [for Southern Africa] and in Abidjan. There are challenges eg currency, competition, etc.
- Current ratings by GCR and AM Best are good.
- Lots of cash, bank deposits and Gov't securities.
- Property "valuation gains" [if any] will come through in 2H.

@VVS is content with Mwarania and team. Applause Applause Applause


Very good performance. Received a dividend this month, Waiting for a bonus end of year smile
Life is short. Live passionately.
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Liv
#11 Posted : Wednesday, August 31, 2016 1:39:29 AM
Rank: Veteran


Joined: 11/14/2006
Posts: 1,311

KenRe generated negative cash from its operations..... With such profitability something is not adding up.
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alotoftalk
#12 Posted : Wednesday, August 31, 2016 3:01:08 AM
Rank: Member


Joined: 8/27/2015
Posts: 138
Location: Harare
Liv wrote:

KenRe generated negative cash from its operations..... With such profitability something is not adding up.


This can be explained from the following three observations:

(i) They must have classified their purchase of investment securities as operating activities which is not consistent with the FY15 annual report. For Q216 CFO for 12/31 is KES 93,922MM vs KES 2,651,959MM in FY15.

(ii) Looking at the balance sheet they have increased their GoK securities by ~KES 1 Billion.

(iii) And the increase in receivables arising out of reinsurance arrangements of ~KES 1 Billion accounts.
Investment philosophy development in progress...
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VituVingiSana
#13 Posted : Wednesday, August 31, 2016 10:27:42 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Insurance Firms' accounting is different. Warren Buffett discusses this at length in his Chairman's Statements for Berkshire Hathaway

- KenRe purchased an additional stake in ZepRe and now that it owns 20%+ it accounts for it as an associate not an "investment"
- The Receivables (as @alotoftalk mentioned) jumped as KenRe wrote a lot of business in June 2016. Payments/Premiums to be received in 2H 2016.
- Re/insurance firms may buy "contracts" that require an immediate payment/expenditure but receive payment/income in later periods.

We need the full set of accounts to better understand the negative Operating CF.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Liv
#14 Posted : Wednesday, August 31, 2016 10:33:04 AM
Rank: Veteran


Joined: 11/14/2006
Posts: 1,311
alotoftalk wrote:
Liv wrote:

KenRe generated negative cash from its operations..... With such profitability something is not adding up.


This can be explained from the following three observations:

(i) They must have classified their purchase of investment securities as operating activities which is not consistent with the FY15 annual report. For Q216 CFO for 12/31 is KES 93,922MM vs KES 2,651,959MM in FY15.

(ii) Looking at the balance sheet they have increased their GoK securities by ~KES 1 Billion.

(iii) And the increase in receivables arising out of reinsurance arrangements of ~KES 1 Billion accounts.



These do not explain it fully given that net profit plus non cash items in the PL is more than Kes 2.2 Billion.

Don't you think there may be some asset increases that were not expensed in the PL so that profitability looks good?

Cash is fact profit is an opinion
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VituVingiSana
#15 Posted : Wednesday, August 31, 2016 11:04:40 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Liv wrote:
alotoftalk wrote:
Liv wrote:

KenRe generated negative cash from its operations..... With such profitability something is not adding up.


This can be explained from the following three observations:

(i) They must have classified their purchase of investment securities as operating activities which is not consistent with the FY15 annual report. For Q216 CFO for 12/31 is KES 93,922MM vs KES 2,651,959MM in FY15.

(ii) Looking at the balance sheet they have increased their GoK securities by ~KES 1 Billion.

(iii) And the increase in receivables arising out of reinsurance arrangements of ~KES 1 Billion accounts.



These do not explain it fully given that net profit plus non cash items in the PL is more than Kes 2.2 Billion.

Don't you think there may be some asset increases that were not expensed in the PL so that profitability looks good?

Cash is fact profit is an opinion

Yes, you are right. And I am a-OK with KenRe.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#16 Posted : Wednesday, August 31, 2016 2:39:01 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
A 1:1 or 1:2 bonus issue won't be bad at full year results
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#17 Posted : Wednesday, August 31, 2016 3:32:31 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,118
Location: Nairobi
Ericsson wrote:
A 1:1 or 1:2 bonus issue won't be bad at full year results
GoK mambos. I think KenRe should do a Rights Issue like KCB and GoK doesn't participate. This will increase the non-GoK shareholding.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#18 Posted : Wednesday, August 31, 2016 4:04:55 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
@VVS
Rights issue ya nini.The company has alot of retained earnings and cash reserve.
Mimi nataka bonus shares na dividend apana patia mimi stress ya kutoa pesa rights issue
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Angelica _ann
#19 Posted : Wednesday, August 31, 2016 4:25:04 PM
Rank: Elder


Joined: 12/7/2012
Posts: 11,908
Ericsson wrote:
@VVS
Rights issue ya nini.The company has alot of retained earnings and cash reserve.
Mimi nataka bonus shares na dividend apana patia mimi stress ya kutoa pesa rights issue

Laughing out loudly Laughing out loudly Laughing out loudly You were very vocal and supported KENGEN rights, whereas here umeruka?
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Ericsson
#20 Posted : Wednesday, August 31, 2016 4:48:26 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,701
Location: NAIROBI
@Angelica_ann;
Inategemea na fundamentals ya kampuni.
Rights issue yake itanikula pesa mingi sana
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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