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ARM Cement FY16
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Pesa Nane
#11 Posted : Tuesday, May 02, 2017 11:54:24 AM
Rank: Elder

Joined: 5/25/2012
Posts: 4,105
Location: 08c
Quote:
...in order to remain focused on the cement business, and to raise cash and release a significant amount of working capital locked up in the Mavuno Fertilisers division, the company decided to exit all of the non cement business. After going through a due selection process, the company has entered into an agreement for the sale of the non cement to a strategic investor, and expects to close the sale during the 3rd quarter of the year.



"Smell of manure at @ARMCement1 FY 2016 - lower revenue, 3.2bn loss, no dividend! A decision to exit fertilizer biz" - Wazua
Pesa Nane plans to be shilingi when he grows up.
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Metasploit
#12 Posted : Tuesday, May 02, 2017 12:21:16 PM
Rank: Veteran

Joined: 3/26/2012
Posts: 985
Location: Dar es salaam,Tanzania
Metasploit wrote:
One thing i have learn,ALWAYS BUY THE RUMOUR SELL THE FACT



Another one,

NO MATTER WHAT,NEVER BUY A SHARE WHICH IS OVERBOUGHT..THERE IS ALWAYS AN OPPORTUNITY WITH OTHER SHARES

“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
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hisah
#13 Posted : Tuesday, May 02, 2017 12:59:00 PM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
Metasploit wrote:
One thing i have learn,ALWAYS BUY THE RUMOUR SELL THE FACT


Now you see the front running...
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Ebenyo
#14 Posted : Tuesday, May 02, 2017 2:28:53 PM
Rank: Veteran

Joined: 4/4/2016
Posts: 2,016
Location: Kitale
Ericsson wrote:
Company was mismanaged by the founding family and then once done they sold majority stake to CDC of UK.
Kazi iendelee.
What is being witnessed in ARM is similar to what Nakumatt is undergoing;difference been Nakumatt is yet to find a strategic investor.




The money from cdc is not reflected here as it was given the other day.Next year results will give a true picture of the company state of health.
Towards the goal of financial freedom
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Pesa Nane
#15 Posted : Tuesday, May 02, 2017 4:21:55 PM
Rank: Elder

Joined: 5/25/2012
Posts: 4,105
Location: 08c
Ebenyo wrote:
Ericsson wrote:
Company was mismanaged by the founding family and then once done they sold majority stake to CDC of UK.
Kazi iendelee.
What is being witnessed in ARM is similar to what Nakumatt is undergoing;difference been Nakumatt is yet to find a strategic investor.



The money from cdc is not reflected here as it was given the other day.Next year results will give a true picture of the company state of health.


Quote:
Subsequent to the CDC equity investment the company, total debt reduced to KES 13 billion from KES 24 billion the previous year. This allowed the company to start investing internal cash generated into its normalized working capital resulting in significantly improved operational performance in the last quarter of the year

Pesa Nane plans to be shilingi when he grows up.
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  | | Edit by user: Tuesday, May 02, 2017 4:23 PM | Reason: Not specified
Ericsson
#16 Posted : Tuesday, May 02, 2017 4:28:26 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,804
Location: NAIROBI
Pesa Nane wrote:
Ebenyo wrote:
Ericsson wrote:
Company was mismanaged by the founding family and then once done they sold majority stake to CDC of UK.
Kazi iendelee.
What is being witnessed in ARM is similar to what Nakumatt is undergoing;difference been Nakumatt is yet to find a strategic investor.



The money from cdc is not reflected here as it was given the other day.Next year results will give a true picture of the company state of health.


Quote:
Subsequent to the CDC equity investment the company, total debt reduced to KES 13 billion from KES 24 billion the previous year. This allowed the company to start investing internal cash generated into its normalized working capital resulting in significantly improved operational performance in the last quarter of the year




Ebenyo
Your answer is as Pesa Nane has quoted for you.
Just imagine if that money hadn't arrived how the loss would have been
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#17 Posted : Tuesday, May 02, 2017 10:56:04 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Ebenyo wrote:
Ericsson wrote:
Company was mismanaged by the founding family and then once done they sold majority stake to CDC of UK.
Kazi iendelee.
What is being witnessed in ARM is similar to what Nakumatt is undergoing;difference been Nakumatt is yet to find a strategic investor.




The money from cdc is not reflected here as it was given the other day.Next year results will give a true picture of the company state of health.

The cash injection has been reflected since it came in in 3Q 2016. The full
benefit of the cash doesn't show up but for 4Q. A better FY 2017 can be expected with huge savings on interest costs BUT I would wait for 1H 2017 results to see where this firm might be headed. ARM got into a lot of trouble in the 90s by loading up on debt but was bailed out by Bamburi. This is a repeat.

The sale of non-core businesses may be a good idea to release cash & pay down debt OR boost working capital.

ARM's huge bet on TZ hasn't paid off. Delays in commissioning the plant then the drama with coal supplies and depressed market. TZ isn't a friendly place to do business for Kenyan firms.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Tuesday, May 02, 2017 10:58 PM | Reason: Not specified
lochaz-index
#18 Posted : Wednesday, May 03, 2017 8:34:58 AM
Rank: Veteran

Joined: 9/18/2014
Posts: 1,127
VituVingiSana wrote:
Ebenyo wrote:
Ericsson wrote:
Company was mismanaged by the founding family and then once done they sold majority stake to CDC of UK.
Kazi iendelee.
What is being witnessed in ARM is similar to what Nakumatt is undergoing;difference been Nakumatt is yet to find a strategic investor.




The money from cdc is not reflected here as it was given the other day.Next year results will give a true picture of the company state of health.

The cash injection has been reflected since it came in in 3Q 2016. The full
benefit of the cash doesn't show up but for 4Q. A better FY 2017 can be expected with huge savings on interest costs BUT I would wait for 1H 2017 results to see where this firm might be headed. ARM got into a lot of trouble in the 90s by loading up on debt but was bailed out by Bamburi. This is a repeat.

The sale of non-core businesses may be a good idea to release cash & pay down debt OR boost working capital.

ARM's huge bet on TZ hasn't paid off. Delays in commissioning the plant then the drama with coal supplies and depressed market. TZ isn't a friendly place to do business for Kenyan firms.

Also skeptical on this one till HY 2017 sheds more light. It appears that the problem of loading up debt is very cyclical (mismanagement of working capital or just pure cash flow problems?). The ratios - even after the cash injection - suggests the issue is destined to recur without a substantial re-jig in management of the firm.
The main purpose of the stock market is to make fools of as many people as possible.
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VituVingiSana
#19 Posted : Wednesday, May 03, 2017 11:31:15 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Cash-flow issues vs Management. It's not easy to predict political thinking/policies. TZ is a nightmare. Magufuli means well but banning cheaper & better quality coal imports has hurt ARM. TZ should have ramped up coal production before banning imports. Local coal production will rise but in the meantime the under-utilization will continue. The economic environment is TZ is also grim in the near term. I will wait for 1H results before I consider ARM as investable vs other options.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Aguytrying
#20 Posted : Thursday, May 04, 2017 7:44:12 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Debt can humble the biggest best companies, making them look ordinary
The investor's chief problem - and even his worst enemy - is likely to be himself
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