Good company, but too much government control. The government will never let go of this company due to its monopoly status and the fact that it is a utility company. There is always a flip side of being a long term business partner with the government. It does not really care about profits and operates at the expense of minority shareholders. Good valuation, bad long term business partner...so a bad counter in my humble opinion.

https://mobile.twitter.c.../552132576551661569?p=v Will this make a difference?

Two pieces of information this week that shows that Kenya Power is on the right track:

1. The borrowing of Ksh 45B from World Bank at 2% p.a in order to repay bank loans that were taken at commercial rates hence saving Ksh 1.5B p.a.
2. The reduction of electricity system losses by 2.5%; each 1% reduction in system losses saves Ksh 1B hence the 2.5% reduction is equivalent to Ksh 2.5B.

Those two moves alone will save the company Ksh 4B which will reflect on the profits. The M.D has already projected pre-tax profits for 2015 to hit Ksh 15B (from last years Ksh 10B)hence a 50% rise in pretax profits......its easy to see that the two moves above alone are able to generate that increase.

Happy Hunting.

As we are busy discussing the disadvantages of Government controlled companies we forget the advantages like ability to borrow at lower rates. 2% is more than free money. If you factor in inflation, it's like Kenya Power are actually being paid to take the money.

Traditionally, government owned companies are mismanaged leading to reduced profits or in most cases, losses. This is not the case with Kenya Power and Kenya Re. These two companies turn in a handsome profit.

Do we buy shares based on current performance and projected performance or performance for 13 years ago???

Where were Equity, KCB et. al in 2002??

Kenya stuck with too much power. You are joking, right?

The last time I checked the population supplied with power was about 15-20%.

How then will 5000MW become excess ?

I will stock this stock till it goes past 20. Cheap loans equals more money to improve the grid

2013 – (-5.5%)
2014 – 87%
HY 2015- 38%
As you can see above, the company in on the right path to growth. P/E is around 4 which makes it extremely attractive despite the large government shareholding. Sometimes one has to make a decision and compromises, because ideal counters dont exist...so I changed my mind after realizing the heavy discount on this counter. It has only one major disadvantage, which is large government shareholding. If the company is hungry for cash, and does not want to have a rights issue, it may give bonus shares instead and invest the unlocked funds. So I personally think the low dividend problem can be solved through bonus shares or astronomical capital gains. People have made money in counters that are majority held by Uncle Sam. The trick is to know when the leak appears and act accordingly.

The one thing that will finish this company is the liberalization of power distribution