KQ today at 17.05.heading south

BUYER BEWARE:

All financial data on KQ that is in print in newspapers and stocks websites have factored only 461,615,483 KQ Shares thus historical Eps of Kshs 7.65, Trailing p/e of 1.83 and Div of Kshs 1.50

You need to factor in new shares to have proper defined history..

Thus, on 1,94Billion Shares.. Historical Eps is Kshs1.82,Div of Kshs 0.35 and at a share price of 14.00..this translates to a trailing p/e of 7.69 and not 1.83 as reported in press and on Wazua's stock profiler.. http://www.wazua.co.ke/i...stor/stockssummary.aspx

Going forward, profit warning projected fall of 25% on earnings thus EPS expected for 2011-12 is Kshs1.36 and thus at price of 14.00, p/e shoots up to 10.29

It is always advisable to buy a stock whose year-on-year earnings growth is about twice the p/e ...the only justification of buying KQ is that it grows it's earnings for next year by AT LEAST 20.6%... which is unlikely.

The projected earnings growth they expect is about 75%.. Hahahahahahahahahah! ..nice one..especially considering the fact that the reasons for profit warnings are not controllable by KQ and there's no probability of mitigating them should they persist in the new year..add on alshabaab, elections and all other crap kenya is known for..

the only price i'd consider is therefore..based on expected full year earnings of 2011-12, plus a dividend of at least Kshs0.35..is at most..9.50.

I doubt the dividend will happen though.

Growth in passenger & cargo numbers does not mean much unless accompanied by increasing profit margins per passenger and per unit of cargo..

diminishing operating margins imply KQ is spending more to increase passenger and cargo numbers than it is making for shareholders' troubles..

PS:
About 22.86% of KQ is Owned by individuals..the rest is owned by KLM, Gvt and Institutional investors.. This implies over 400 Million shares will be held by individual shareholders...hence over supply for short term trading...even at prices of sub 10.bob..

i'll just buy this thing coz the index is looking to be in an up move . so guys will be bullish. its just a matter of time

the last comm i saw frm KQ was that the case was still in court pending determination. r u saying KQ settled n reinstated workers?
Either way, if this issue is nt addressed, th share performance will remain depressed altho significantly improved financial results may overshadow this

@hisah, @Gadaffi, on the court case, we may go by that link given by @obiero.

@Obiero, H1 results was a net loss of KES 4.778 Billion. How could KQ have made a massive net profit of KES 4.338 Billion in H2 results so that FYR can be the said 'respectable' net loss not exceeding KES 450 Million

The horse itself painted a neutral picture on its 3Q operating statistics. http://www.kenya-airways.com/Ho...3_OCT_to_DEC_2012/?dis=y

The total passenger tally, which closed at 991,149, indicatef a growth of 3.6% compared to similar period last year. The resultant cabin factor (the number of seats sold)at 69.7% was lower than prior year’s 71.7%.

Within Africa but excluding Kenya (which contibutes c50% of revenue), passengers uplifted totalled 516,894 indicating a growth of 2.9% on the back of 10.1% capacity growth. The resultant passenger cabin factor of 63.6% was 4.5 percentage points lower than similar period last year.

Passenger uplift to Europe (which contributes c26% to revenue) at 95,036 was a reduction from last year’s level of 117,527 following capacity reduction of 26.6% compared to the same quarter of prior year due to capacity rationalization occasioned by the Euro zone crisis and the suspension of the Rome flights.

The two regions mentioned above, which are the main KQ routes, hadn't done well as at end of Q3. I honestly dont expect the H2 profit you allude.

On fuel derivatives, they have been a double edged sword in the past and i dont think anybody should buy KQ based on this coz its not KQ business.

That said, KQ remains a very high beta stock for both FAs and TAs

Unless there's a turn around in operating margins..it is as crap as the first day i put this up... and getting worse... the answer is not in increased revenues but in managing costs of acquiring that revenue.

..of-late, travelers are heaping praise on KQ for its inflight services..i still wonder..at what cost are these services? ...and NO, i'm not calling for crappy service either..just for services whose cost is recoverable in their pricing of services

..there's a financial advice that cautions against spending money you don't have on things you don't need to please people you don't even care about.

Can someone offer Naikuni a job in civil service?...so that he leaves KQ

Any recommendations on who should, in your opinion, take over?

Would you recommend internal sourcing or an outsider for the corner office?

Be careful what you wish for. Naikuni might be appointed as the CAbinet Secretary for transport and communication and end up formulating policies which annihilates KQ even further.