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Njunge
#1 Posted : Wednesday, September 02, 2009 5:03:00 AM
Rank: Elder


Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
Ooops.......Pre-tax profits down by 29.5%.....Looks like another Paka in the making.

Old man about town....
Nothing great was ever achieved without enthusiasm.
Mainat
#2 Posted : Wednesday, September 02, 2009 5:12:00 AM
Rank: Veteran


Joined: 11/21/2006
Posts: 1,590
There is a one-off depreciation charge. Turnover rose by almost 50%...

www.mjengakenya.blogspot.com
Sehemu ndio nyumba
Sober
#3 Posted : Wednesday, September 02, 2009 5:21:00 AM
Rank: Elder


Joined: 11/27/2007
Posts: 3,604
revenue increased by 55% to 1.06bn and the gross profit margin incressed from 343 to 468million which to me is a great improvement. have a look at this,the counter only traded 50,000 shares yeasterday,ask yourself why.

A likely impossibility is always preferable to an unconvincing posibility.
African parents don't know how to say sorry.. the closest you will get to a sorry is a 'have you eaten'
Gordon Gekko
#4 Posted : Wednesday, September 02, 2009 5:21:00 AM
Rank: Elder


Joined: 5/27/2008
Posts: 3,760
I remember saying in a previous post that buying Openview was misplaced and it was overpriced. There are no synergies. Am I vindicated?
Njunge
#5 Posted : Wednesday, September 02, 2009 5:22:00 AM
Rank: Elder


Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@Mainat,

302M for administration costs is way high,ain't it?

@SK/All,

How comes i can't move this post to investments section?.

Old man about town....
Nothing great was ever achieved without enthusiasm.
Mainat
#6 Posted : Wednesday, September 02, 2009 5:27:00 AM
Rank: Veteran


Joined: 11/21/2006
Posts: 1,590
Njung'e-admin expense is a Ksh100mn higher than last yr and I believe partly relates to buying the remaining shares in Openview which AK will squeeze until it becomes profitable.

www.mjengakenya.blogspot.com
Sehemu ndio nyumba
Djinn
#7 Posted : Wednesday, September 02, 2009 5:36:00 AM
Rank: Elder


Joined: 11/13/2008
Posts: 1,565
@Gordon Gekko - I thinkl buying openview was s sound decision - perhaps it was just the timing as the downturn has affected many businesses and IT budgets stand at the end of the line when looking at other capital expenses companies have to deal with. Overall IT spending has been cut. But looking ahead,it might be a bit rosier if they get their act together - IT Services (managed services,hosting,datacentres,etc) though with only 1.25% stake in TEAMs I am not sure what AK real plans are in that regard and many IT Servicesx hinge on good connectivity (AK will need to lease capacity to clients to use its datacentre,etc clients it gets through OpenView).

The problem with equality is that we desire that it be with those that have more than us rather that those that have less
Djinn
#8 Posted : Wednesday, September 02, 2009 5:42:00 AM
Rank: Elder


Joined: 11/13/2008
Posts: 1,565
and generally looking ahead,I think you can expect more drops in profit for a few reasons 1)Unified licences make all current telco market players eligible to play in each others back yards 2)Arrival of cable - double effect - investment in cables and or cost of leasing capacity for 20 years AND arrival of cables is forcing drastic bandwidth price reductions - so far to abt 50% 3)Market Saturation (no room for 'real' growth except in the home segment which is already getting GOOD connectivity deals from SCOM,Orange and Zain through their 3G/EDGE/ADSL/etc connections). Right now the 'new' Telkom is AK's biggest threat. They have also suffered some customer loss to Zuku and Orange - us included smile



So overall,with declining prices and market saturation,it will be the same as with Safaricom,except that with SCOM they CAN grow revenues using data offerings but if AK is already reporting lower profits and can only look ahead to lower prices and a saturated market - it might be more bleak. Again this is why they need to diversify into IT Services (thru Openview) to add a new revenue stream and add value to their data (and small voice) offerings.



The problem with equality is that we desire that it be with those that have more than us rather that those that have less.

Djinn
#9 Posted : Wednesday, September 02, 2009 5:50:00 AM
Rank: Elder


Joined: 11/13/2008
Posts: 1,565
@Mainat - they have also invested heavily in terrestrial fibre (to businesses and apartments in upmarket areas) though recent reports indicate there might be a delay in operationalising their metropolitan fibre

The problem with equality is that we desire that it be with those that have more than us rather that those that have less
Djinn
#10 Posted : Wednesday, September 02, 2009 6:05:00 AM
Rank: Elder


Joined: 11/13/2008
Posts: 1,565
in BD - '“The good news is that once the second fibre is in place and we can retire the satellite,we expect to see gross margins rise by more than the increase in depreciation,”' NOT TRUE - Satellite bandwidth cannot be entirely retired.

The problem with equality is that we desire that it be with those that have more than us rather that those that have less
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