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Kenya Airways...why ignore..
Rank: Veteran Joined: 8/16/2009 Posts: 994
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 Business Daily wrote: Add new roots
“Our introduction of the two Bombardier Q400 aircraft made it possible to add new routes Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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@vvs, we're still awaiting a response. Cde Monomotapa wrote:VituVingiSana wrote:Negative Shareholders Equity of 33bn. Let's put that into perspective. KQ needs to make PAT of 3.3bn/year for 10 years before it gets to positive territory. 10 years.
What was the PAT for the BEST year that KQ had?
If you invest 5/- in KQ by buying shares of KQ vs 5/- in 13% (net of tax) IFB ... the IFB interest for 10 years = 7.50 (compounded interest) + 5/- principal = 12.50
Anyway, off to KK & KenRe I go. No. 1 fan. Shore up yourself and tell the children the Truth. As you are a holder of KK, how long did KK take to get out of doldrums? What did KK do as well? You make winning sweet..!
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Rank: Chief Joined: 1/3/2007 Posts: 18,298 Location: Nairobi
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Kausha wrote:Just surprised lenders especially local ones have not moved to recall their debt. -33B equity suggests they are tottering on collapse. They will very soon be unable to meet basic obligations like salaries. KQ is already in the doldrums. The bills are piling up. Ngunze even said they borrowed to pay salaries. Pilots even said, at one point, some of their loan obligations were not being met when KQ hadn't forwarded the monies deducted. GoK stepped in with 4bn which went back to GoK [KRA, etc]. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,298 Location: Nairobi
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Cde Monomotapa wrote:VituVingiSana wrote:Negative Shareholders Equity of 33bn. Let's put that into perspective. KQ needs to make PAT of 3.3bn/year for 10 years before it gets to positive territory. 10 years.
What was the PAT for the BEST year that KQ had?
If you invest 5/- in KQ by buying shares of KQ vs 5/- in 13% (net of tax) IFB ... the IFB interest for 10 years = 7.50 (compounded interest) + 5/- principal = 12.50
Anyway, off to KK & KenRe I go. No. 1 fan. Shore up yourself and tell the children the Truth. As you are a holder of KK, how long did KK take to get out of doldrums? What did KK do as well? You make winning sweet..! Kabisa! In 2011-12 I was all gung-ho about KK. Segman whispered sweet nothings to us. He even shouted on top the rooftops. Press releases every month. I bought into it. Puma showed up and we (VVS included) went crazy. @VVS was in love. Then came out the truth. Segman had entered into forwards at 100+ and the KES went from 82 to 107 to 84. And those forwards had to be paid. When oil prices were rising, Segman bought hedges on oil too! Oil prices rose to $140 then fell to $90-ish. KK was effectively buying oil at $110+ when spot prices were much lower. A loss of 6bn. Almost wiped out the Revenue Reserves. Segman had jilted @VVS. Exit Segman. Enter Ohana. Ohana started selling properties (nice capital gains when revalued) among other assets. Employees (excess, thieves, lazy) were fired. Capex (stations looked old, etc) was reduced to save cash. Inventories (no more speculation) were trimmed down. OTS participation was reduced. No more fighting for unprofitable market share. Credit terms to customers and dealers were reduced. Dealers that didn't pay were cut off leading to dry-outs. Some dealers were kicked out. Some customers were cut off. Market share dropped. Debt was reduced. Dividends were eliminated. Ohana stabilized KK through the above actions. Tough renegotiations to restructure loans with the banks. The hedges were 'burnt off' [expired & paid off] and a board decision was made NOT to enter into new hedges. KK borrowed KES to pay down USD debt not related to working capital. All subsidiaries were told that HQ will not bail them out. Subsidiaries were told to borrow locally and pay off USD debt. Some were told to pay back HQ. KES debt was reduced in line with the reduction in inventories. Lucky for Ohana, lower oil prices ($40-60) meant USD 1mn could buy 2x the petrol vs 2011-12. 2014: The turnaround was happening. A profit was declared. A small token dividend was paid. 2015: Debt is significantly lower. 1H 2015 results were very good. And 2H is expected to be better. Subsidiaries have started Capex spend. Rwanda has added stations. KK is planning to build an office complex in 2016-18 which will provide rental income. Castrol-BP agreement means KK will expand its production and distribution of Castrol products. Outstanding Issues: GoK has acknowledged but not settled the Yield Shift losses on behalf on KPRL. It's about if not when. That's cash waiting to be collected. Not in 2015 but in future years. KPC has been told they owe money to KK. Not a question of if but how much. One day the court cases will come to a logical conclusion. That's extra cash whenever it comes. And KK has turned from a brash teenager to a more mature firm. Shareholders (@VVS et al) will be more careful this time around. We will question management more aggressively. 2011: KK 16/- KQ: 38/- [I think] 2012: KK 15/- KQ 14/- [Rights] 2015: KK 8.50 KQ: 4/- KK's NAV is around 7 today without accounting for revaluation gains + KPRL + KPC. KQ's NAV is negative 22-ish. I doubt there's anything left to revalue! Should I have sold KK at 16 in 2012? YES.  Did I sell KK at 16 in 2012? NO. Did I buy KK at 10? YES  did I buy Kk at 9? YES Did I buy Kk at 8? YES  Did I buy KK at 7+? YES Did I sell KQ at 14-ish in 2012? YES. [Proceeds went into KenRe & KK] Looking Forward: I see KK adding KES 1-2 in PAT EPS annually. That's 12% per year. IFBs offer 13%. I do not really care about KQ but for my taxes being used to bail it out. It needs to make (or raise) 33bn to get it to positive NAV. Dream on. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Great trial @vvs, but not good enough. To avoid the bailout being machinated about, then we introduce the so called deep pocketed middle Eastern partners - union drama free. There is a working relationship with Etihad.
Etihad deepens cooperation with Air France-KLMhttp://themalaysianreser...t&utm_medium=twitter
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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@VVS I am inspired by your analysis. This is what I need to make a valid decision! Thumbs up! John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Chief Joined: 1/3/2007 Posts: 18,298 Location: Nairobi
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[quote=Cde Monomotapa]Great trial @vvs, but not good enough. To avoid the bailout being machinated about, then we introduce the so called deep pocketed middle Eastern partners - union drama free. There is a working relationship with Etihad.
Etihad deepens cooperation with Air France-KLMhttp://themalaysianreser...&utm_medium=twitter[/quote] Matters naught to me. Good luck. Cheers. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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VituVingiSana wrote:[quote=Cde Monomotapa]Great trial @vvs, but not good enough. To avoid the bailout being machinated about, then we introduce the so called deep pocketed middle Eastern partners - union drama free. There is a working relationship with Etihad.
Etihad deepens cooperation with Air France-KLMhttp://themalaysianreser...&utm_medium=twitter[/quote] Matters naught to me. Good luck. Cheers. 
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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Cde Monomotapa wrote:VituVingiSana wrote:[quote=Cde Monomotapa]Great trial @vvs, but not good enough. To avoid the bailout being machinated about, then we introduce the so called deep pocketed middle Eastern partners - union drama free. There is a working relationship with Etihad.
Etihad deepens cooperation with Air France-KLMhttp://themalaysianreser...&utm_medium=twitter[/quote] Matters naught to me. Good luck. Cheers. @cde. When a company makes a 8bn loss and does nothing about it run away. Makes another >10bn loss the next year and still does nothing run!!! KK and KQ made ground breaking multibillion shilling losses in the same year. KK reacted swiflty, decisively and brutally. KQ did not. even three years later they have not. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Aguytrying wrote:Cde Monomotapa wrote:VituVingiSana wrote:[quote=Cde Monomotapa]Great trial @vvs, but not good enough. To avoid the bailout being machinated about, then we introduce the so called deep pocketed middle Eastern partners - union drama free. There is a working relationship with Etihad.
Etihad deepens cooperation with Air France-KLMhttp://themalaysianreser...&utm_medium=twitter[/quote] Matters naught to me. Good luck. Cheers. @cde. When a company makes a 8bn loss and does nothing about it run away. Makes another >10bn loss the next year and still does nothing run!!! KK and KQ made ground breaking multibillion shilling losses in the same year. KK reacted swiflty, decisively and brutally. KQ did not. even three years later they have not.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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VituVingiSana wrote:Cde Monomotapa wrote:VituVingiSana wrote:Negative Shareholders Equity of 33bn. Let's put that into perspective. KQ needs to make PAT of 3.3bn/year for 10 years before it gets to positive territory. 10 years.
What was the PAT for the BEST year that KQ had?
If you invest 5/- in KQ by buying shares of KQ vs 5/- in 13% (net of tax) IFB ... the IFB interest for 10 years = 7.50 (compounded interest) + 5/- principal = 12.50
Anyway, off to KK & KenRe I go. No. 1 fan. Shore up yourself and tell the children the Truth. As you are a holder of KK, how long did KK take to get out of doldrums? What did KK do as well? You make winning sweet..! Kabisa! In 2011-12 I was all gung-ho about KK. Segman whispered sweet nothings to us. He even shouted on top the rooftops. Press releases every month. I bought into it. Puma showed up and we (VVS included) went crazy. @VVS was in love. Then came out the truth. Segman had entered into forwards at 100+ and the KES went from 82 to 107 to 84. And those forwards had to be paid. When oil prices were rising, Segman bought hedges on oil too! Oil prices rose to $140 then fell to $90-ish. KK was effectively buying oil at $110+ when spot prices were much lower. A loss of 6bn. Almost wiped out the Revenue Reserves. Segman had jilted @VVS. Exit Segman. Enter Ohana. Ohana started selling properties (nice capital gains when revalued) among other assets. Employees (excess, thieves, lazy) were fired. Capex (stations looked old, etc) was reduced to save cash. Inventories (no more speculation) were trimmed down. OTS participation was reduced. No more fighting for unprofitable market share. Credit terms to customers and dealers were reduced. Dealers that didn't pay were cut off leading to dry-outs. Some dealers were kicked out. Some customers were cut off. Market share dropped. Debt was reduced. Dividends were eliminated. Ohana stabilized KK through the above actions. Tough renegotiations to restructure loans with the banks. The hedges were 'burnt off' [expired & paid off] and a board decision was made NOT to enter into new hedges. KK borrowed KES to pay down USD debt not related to working capital. All subsidiaries were told that HQ will not bail them out. Subsidiaries were told to borrow locally and pay off USD debt. Some were told to pay back HQ. KES debt was reduced in line with the reduction in inventories. Lucky for Ohana, lower oil prices ($40-60) meant USD 1mn could buy 2x the petrol vs 2011-12. 2014: The turnaround was happening. A profit was declared. A small token dividend was paid. 2015: Debt is significantly lower. 1H 2015 results were very good. And 2H is expected to be better. Subsidiaries have started Capex spend. Rwanda has added stations. KK is planning to build an office complex in 2016-18 which will provide rental income. Castrol-BP agreement means KK will expand its production and distribution of Castrol products. Outstanding Issues: GoK has acknowledged but not settled the Yield Shift losses on behalf on KPRL. It's about if not when. That's cash waiting to be collected. Not in 2015 but in future years. KPC has been told they owe money to KK. Not a question of if but how much. One day the court cases will come to a logical conclusion. That's extra cash whenever it comes. And KK has turned from a brash teenager to a more mature firm. Shareholders (@VVS et al) will be more careful this time around. We will question management more aggressively. 2011: KK 16/- KQ: 38/- [I think] 2012: KK 15/- KQ 14/- [Rights] 2015: KK 8.50 KQ: 4/- KK's NAV is around 7 today without accounting for revaluation gains + KPRL + KPC. KQ's NAV is negative 22-ish. I doubt there's anything left to revalue! Should I have sold KK at 16 in 2012? YES. Did I sell KK at 16 in 2012? NO. Did I buy KK at 10? YES did I buy Kk at 9? YES Did I buy Kk at 8? YES Did I buy KK at 7+? YES Did I sell KQ at 14-ish in 2012? YES. [Proceeds went into KenRe & KK] Looking Forward: I see KK adding KES 1-2 in PAT EPS annually. That's 12% per year. IFBs offer 13%. I do not really care about KQ but for my taxes being used to bail it out. It needs to make (or raise) 33bn to get it to positive NAV. Dream on. This KK story deserves a pin up on the wall The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Haya watu kwenda nyumbani sasa.... 14 managers sent home from Commercial.... possunt quia posse videntur
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Rank: Member Joined: 5/8/2008 Posts: 288
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maka wrote:Haya watu kwenda nyumbani sasa....
14 managers sent home from Commercial.... Which positions/titles? I wonder whether Commercial is the only problem
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Rank: Elder Joined: 6/23/2009 Posts: 14,069 Location: nairobi
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Jitahidi wrote:maka wrote:Haya watu kwenda nyumbani sasa....
14 managers sent home from Commercial.... Which positions/titles? I wonder whether Commercial is the only problem I also wonder at what price did @vvs buy the KQ.. Must be above KES 55 from his own admission. No wonder the eternal bitterness
KQ ABP 4.26
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Rank: Chief Joined: 1/3/2007 Posts: 18,298 Location: Nairobi
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obiero wrote:Jitahidi wrote:maka wrote:Haya watu kwenda nyumbani sasa....
14 managers sent home from Commercial.... Which positions/titles? I wonder whether Commercial is the only problem I also wonder at what price did @vvs buy the KQ.. Must be above KES 55 from his own admission. No wonder the eternal bitterness Doesn't matter whether I bought at 8 or 20 or 55 or 100 or 120. The management effectively destroyed value. Forget the share price. The NAV was decimated. *The below aren't recommendations just examples* Despite all the criticism Centum has faced, Mworia has built up realizable value (NAV) since 2012. The same for KK under Ohana. And Williamson too. It went through a very rough patch a few years ago. And KenRe under Mwarania. And Safaricom both under MJ & BC. And ARM. This firm has been through some very tough times. And Aga Khan firms. TPSEA is going through tough times but it still builds value. Good managers/owners build value. Share prices can rise & fall. That's OK. A good manager defends 'value' in tough times and increases it during good times. Warren Buffett is less concerned about share prices vs INTRINSIC VALUE. One position [I wish I had more] is Williamson. Tough times come and go. They persevered. 1H 2015-16 results are very good. One firm I wish I had never heard of. Olympia. Run by crooks. Good thing I never trusted Merali so I avoided his firms. Crooks. Anyway, @obiero ... I enjoy these back & forth coz I learnt a lot from @Wazua. We can have fun poking fun at each other or you can personalize your attacks. If the former, I am game. If the latter, it matters little. I am very comfy with KK, KenRe among others. KQ wasn't a fun ride and so I got off in 2012. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 14,069 Location: nairobi
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VituVingiSana wrote:obiero wrote:Jitahidi wrote:maka wrote:Haya watu kwenda nyumbani sasa....
14 managers sent home from Commercial.... Which positions/titles? I wonder whether Commercial is the only problem I also wonder at what price did @vvs buy the KQ.. Must be above KES 55 from his own admission. No wonder the eternal bitterness Doesn't matter whether I bought at 8 or 20 or 55 or 100 or 120. The management effectively destroyed value. Forget the share price. The NAV was decimated. *The below aren't recommendations just examples* Despite all the criticism Centum has faced, Mworia has built up realizable value (NAV) since 2012. The same for KK under Ohana. And Williamson too. It went through a very rough patch a few years ago. And KenRe under Mwarania. And Safaricom both under MJ & BC. And ARM. This firm has been through some very tough times. And Aga Khan firms. TPSEA is going through tough times but it still builds value. Good managers/owners build value. Share prices can rise & fall. That's OK. A good manager defends 'value' in tough times and increases it during good times. Warren Buffett is less concerned about share prices vs INTRINSIC VALUE. One position [I wish I had more] is Williamson. Tough times come and go. They persevered. 1H 2015-16 results are very good. One firm I wish I had never heard of. Olympia. Run by crooks. Good thing I never trusted Merali so I avoided his firms. Crooks. Anyway, @obiero ... I enjoy these back & forth coz I learnt a lot from @Wazua. We can have fun poking fun at each other or you can personalize your attacks. If the former, I am game. If the latter, it matters little. I am very comfy with KK, KenRe among others. KQ wasn't a fun ride and so I got off in 2012. Hehe. Naona umeogopa kuvua nguo hadharani. No worries.. So at what price/moment would you consider buying into KQ. Personally, I am waiting on the full year
KQ ABP 4.26
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Rank: Chief Joined: 1/3/2007 Posts: 18,298 Location: Nairobi
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obiero wrote:VituVingiSana wrote:obiero wrote:Jitahidi wrote:maka wrote:Haya watu kwenda nyumbani sasa....
14 managers sent home from Commercial.... Which positions/titles? I wonder whether Commercial is the only problem I also wonder at what price did @vvs buy the KQ.. Must be above KES 55 from his own admission. No wonder the eternal bitterness Doesn't matter whether I bought at 8 or 20 or 55 or 100 or 120. The management effectively destroyed value. Forget the share price. The NAV was decimated. *The below aren't recommendations just examples* Despite all the criticism Centum has faced, Mworia has built up realizable value (NAV) since 2012. The same for KK under Ohana. And Williamson too. It went through a very rough patch a few years ago. And KenRe under Mwarania. And Safaricom both under MJ & BC. And ARM. This firm has been through some very tough times. And Aga Khan firms. TPSEA is going through tough times but it still builds value. Good managers/owners build value. Share prices can rise & fall. That's OK. A good manager defends 'value' in tough times and increases it during good times. Warren Buffett is less concerned about share prices vs INTRINSIC VALUE. One position [I wish I had more] is Williamson. Tough times come and go. They persevered. 1H 2015-16 results are very good. One firm I wish I had never heard of. Olympia. Run by crooks. Good thing I never trusted Merali so I avoided his firms. Crooks. Anyway, @obiero ... I enjoy these back & forth coz I learnt a lot from @Wazua. We can have fun poking fun at each other or you can personalize your attacks. If the former, I am game. If the latter, it matters little. I am very comfy with KK, KenRe among others. KQ wasn't a fun ride and so I got off in 2012. Hehe. Naona umeogopa kuvua nguo hadharani. No worries.. So at what price/moment would you consider buying into KQ. Personally, I am waiting on the full year My clothes (except my ngothas) are out for all to see. The internet doesn't forget. I have far more enticing/profitable prospects vs KQ at the moment. Low PER banks at less than 10 PER including Equity, KCB and I&M. KK at PER of 8. PB of 1.2 but without revaluation. Williamson PER of 5, cash of 100/share, PB 0.5 KenRe with PER of 5 and PB of 0.7 I am considering ARM and Centum too. KQ needs to do much more before it is back on my radar. Plus the FD needs to be fired. He is hiding a lot. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 14,069 Location: nairobi
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ProverB wrote: For the year ended 31st March 2010, Kenya Airways Ltd recorded Total revenue of Kshs 70,743,000,000.00, and the company’s Operating Profit amounted to Kshs 1,839,000,000.00 Operating margin = (Operating Profit /Revenues) x 100. = (1,839,000,000.00 / 70,743,000,000.00) x 100 = 2.6% Out of every Kshs1.00 Kenya Airways collected as revenue in the year, it retained only Kshs 0.03, as operating profit after paying for the operational expenses incurred in getting that Kshs 1.00 It is out of that 3Cents that Kenya Airways is to pay out financial costs as well as taxes and the balance retained as profits for share holders. Should we choose to focus only on the company’s core business operations, Kenya Airways operational performance for the just ended period is rather dismal compared to the previous periods For 2010, Kenya Airways had an operating margin of 2.6% For 2009, the operating margin was 5.6% For 2008, the operating margin was 11.6% For 2007, the operating margin was 13.1% Declining operating margins over time should be a warning sign to any investor. On average, out of every kshs1 in revenues that Kenya Airways collects annually, it has overtime paid more and more in operational costs. It could imply that the c ompany is having difficulty in bringing in revenues considering that it registered slightly declined revenues compared to the previous year, or that the management is facing increasing challenges in improving the company’s Operational Efficiency. The 54.5% decline in Operating Profits might explain why despite reporting 148% improvement in earnings, the share registered a 8% decline in trading price as soon as results were published. A lot is learnt by observing Operating profits trend over time, but it should not be the only factor one considers when planning whether or not the Kenya Airways shares are a viable investment. Ceteris paribus.  @ngunze mentions repeatedly that KQ is opearationally sound. atlease the financials support his theory.. operating margin now headed back to natural positivr state..
KQ ABP 4.26
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Rank: Chief Joined: 1/3/2007 Posts: 18,298 Location: Nairobi
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obiero wrote:ProverB wrote: For the year ended 31st March 2010, Kenya Airways Ltd recorded Total revenue of Kshs 70,743,000,000.00, and the company’s Operating Profit amounted to Kshs 1,839,000,000.00 Operating margin = (Operating Profit /Revenues) x 100. = (1,839,000,000.00 / 70,743,000,000.00) x 100 = 2.6% Out of every Kshs1.00 Kenya Airways collected as revenue in the year, it retained only Kshs 0.03, as operating profit after paying for the operational expenses incurred in getting that Kshs 1.00 It is out of that 3Cents that Kenya Airways is to pay out financial costs as well as taxes and the balance retained as profits for share holders. Should we choose to focus only on the company’s core business operations, Kenya Airways operational performance for the just ended period is rather dismal compared to the previous periods For 2010, Kenya Airways had an operating margin of 2.6% For 2009, the operating margin was 5.6% For 2008, the operating margin was 11.6% For 2007, the operating margin was 13.1% Declining operating margins over time should be a warning sign to any investor. On average, out of every kshs1 in revenues that Kenya Airways collects annually, it has overtime paid more and more in operational costs. It could imply that the c ompany is having difficulty in bringing in revenues considering that it registered slightly declined revenues compared to the previous year, or that the management is facing increasing challenges in improving the company’s Operational Efficiency. The 54.5% decline in Operating Profits might explain why despite reporting 148% improvement in earnings, the share registered a 8% decline in trading price as soon as results were published. A lot is learnt by observing Operating profits trend over time, but it should not be the only factor one considers when planning whether or not the Kenya Airways shares are a viable investment. Ceteris paribus. @ngunze mentions repeatedly that KQ is opearationally sound. atlease the financials support his theory.. operating margin now headed back to natural positivr state.. @ProverB hit it out of the park. I wish I had listened to him in 2010. I didn't look at it that way. What a mistake on my end. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 14,069 Location: nairobi
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VituVingiSana wrote:obiero wrote:ProverB wrote: For the year ended 31st March 2010, Kenya Airways Ltd recorded Total revenue of Kshs 70,743,000,000.00, and the company’s Operating Profit amounted to Kshs 1,839,000,000.00 Operating margin = (Operating Profit /Revenues) x 100. = (1,839,000,000.00 / 70,743,000,000.00) x 100 = 2.6% Out of every Kshs1.00 Kenya Airways collected as revenue in the year, it retained only Kshs 0.03, as operating profit after paying for the operational expenses incurred in getting that Kshs 1.00 It is out of that 3Cents that Kenya Airways is to pay out financial costs as well as taxes and the balance retained as profits for share holders. Should we choose to focus only on the company’s core business operations, Kenya Airways operational performance for the just ended period is rather dismal compared to the previous periods For 2010, Kenya Airways had an operating margin of 2.6% For 2009, the operating margin was 5.6% For 2008, the operating margin was 11.6% For 2007, the operating margin was 13.1% Declining operating margins over time should be a warning sign to any investor. On average, out of every kshs1 in revenues that Kenya Airways collects annually, it has overtime paid more and more in operational costs. It could imply that the c ompany is having difficulty in bringing in revenues considering that it registered slightly declined revenues compared to the previous year, or that the management is facing increasing challenges in improving the company’s Operational Efficiency. The 54.5% decline in Operating Profits might explain why despite reporting 148% improvement in earnings, the share registered a 8% decline in trading price as soon as results were published. A lot is learnt by observing Operating profits trend over time, but it should not be the only factor one considers when planning whether or not the Kenya Airways shares are a viable investment. Ceteris paribus. @ngunze mentions repeatedly that KQ is opearationally sound. atlease the financials support his theory.. operating margin now headed back to natural positivr state.. @ProverB hit it out of the park. I wish I had listened to him in 2010. I didn't look at it that way. What a mistake on my end. I will call it a lesson, not a mistake. Will be on the look out for FYR.. Before then, munipate Nyanza..
KQ ABP 4.26
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