Ericsson wrote:Fyatu wrote:VituVingiSana wrote:Ericsson wrote:Profit before tax at ksh.3.089bn
Profit after tax at ksh.1.918bn
No dividend declared
After all the drama, this is much better than I expected. Compare this to some firms that have not turned a profit for 6 years running.
Have the accounts been qualified?
What's the EPS?How many shares does KPLC have?
Going by the numbers provided by @Ericsson, the EPS is ksh. 1 or thereabouts. Therefore earnings = 28% given the current share price of 3.6. How is Return on Assets(ROA) calculated for firms such as Kenya power? What is the formula? I told you this firm if well managed can rival Safaricom
The key measure for this company isn't the EPS.
The problem with this company is cashflow and debt.
It's now relying on short term borrowings to meet it's daily obligations.A big chunk of its cash is going towards debt repayments.
A look at the balance sheet and the P&L statement shows that long term debt reduced by ksh.23bn,ksh.7.8bn was spent on finance costs.
The company cashflow position is at negative ksh.7.6bn
The current liabilities have doubled over the past two years.
The vital cashflow position (operating and investing) is positive and that is what is used to generate cashflow per share. The financing bit is an FYI appendage coz it isn't internally generated from the core activities of the firm but rather a debt book figure. For example if Kenya Power had taken on more debt than it had paid down in the period reported the net cash position from financing activities would have been a positive and will help fib the bottom line net cash position.
The worrying bit is the negative working capital. As much as they paid down long term debt to the tune of 23b they took on short term obligations and decimated its cash holdings (probably from penalties of nonpayment) while at it. This will cripple the firm if the same trend persists.
For the P&L, both the gross and operating margins are shrinking...and after the supposed fudging that's been talked about. As for the ROA, even working with the bottom line of 3b, for a firm with an asset book in excess of 336b that is a paltry 0.89%.
The main purpose of the stock market is to make fools of as many people as possible.