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KenGen HY 2019
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FUNKY
#141 Posted : Thursday, September 05, 2019 11:55:57 AM
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Joined: 4/30/2010
Posts: 1,635
Announce a juicy dividend plus a special dividend and prop up the share price
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VituVingiSana
#142 Posted : Friday, September 06, 2019 6:00:14 PM
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Joined: 1/3/2007
Posts: 18,047
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Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kawi254
#143 Posted : Friday, September 06, 2019 6:15:20 PM
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VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?



2018 AGM someone asked this Question on increasing dividend and management clarified that KenGen's policy is 33% re-investment, 33% dividend, 33%[~30%] cooperate Tax.

Only way for dividend to increase is if the business performance improves.
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Ericsson
#144 Posted : Friday, September 06, 2019 6:56:48 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,636
Location: NAIROBI
kawi254 wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?



2018 AGM someone asked this Question on increasing dividend and management clarified that KenGen's policy is 33% re-investment, 33% dividend, 33%[~30%] cooperate Tax.

Only way for dividend to increase is if the business performance improves.


We wait for the results in a month's time
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#145 Posted : Friday, September 06, 2019 9:03:32 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,047
Location: Nairobi
kawi254 wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?



2018 AGM someone asked this Question on increasing dividend and management clarified that KenGen's policy is 33% re-investment, 33% dividend, 33%[~30%] cooperate Tax.

Only way for dividend to increase is if the business performance improves.
I don't think KenGen has a choice but to cooperate to pay "cooperate" tax Laughing out loudly
Yes, I know you meant corporate tax. And it is not determined by what KenGen wants but depends on the KRA guidelines and tax laws.

Dividends are paid from post-tax profits.

Reinvestment could different from repayment of loans. It could mean investments in new plants or enhancing capacity.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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sparkly
#146 Posted : Saturday, September 07, 2019 10:15:11 AM
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Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?


Leverage, when used optimally gives big returns to equity holders.
Life is short. Live passionately.
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Ericsson
#147 Posted : Saturday, September 07, 2019 12:27:37 PM
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Joined: 12/4/2009
Posts: 10,636
Location: NAIROBI
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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FUNKY
#148 Posted : Saturday, September 07, 2019 1:29:02 PM
Rank: Veteran


Joined: 4/30/2010
Posts: 1,635
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends


They started paying last year after a 2 year dividend drought
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VituVingiSana
#149 Posted : Saturday, September 07, 2019 2:53:55 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,047
Location: Nairobi
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#150 Posted : Saturday, September 07, 2019 2:57:06 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,047
Location: Nairobi
https://www.capitalfm.co...es-kengen-rights-issue/

The Kenya Electricity Generating Company (KenGen) will now be seeking to raise Sh8.64 in its Rights Issue, after the government decided to take up 3 billion shares valued at Sh20.2billion in the issue.
> This was a Debt:Equity Conversion which saved KenGen billions/year in interest costs.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#151 Posted : Saturday, September 07, 2019 6:34:19 PM
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Joined: 12/4/2009
Posts: 10,636
Location: NAIROBI
VituVingiSana wrote:
https://www.capitalfm.co.ke/business/2016/05/govt-takes-sh20-2bn-shares-kengen-rights-issue/

The Kenya Electricity Generating Company (KenGen) will now be seeking to raise Sh8.64 in its Rights Issue, after the government decided to take up 3 billion shares valued at Sh20.2billion in the issue.
> This was a Debt:Equity Conversion which saved KenGen billions/year in interest costs.

To gava that was the easiest option instead of giving money
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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sparkly
#152 Posted : Saturday, September 07, 2019 8:01:49 PM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.


High capital requirements and longer project pay off periods make utilities more attractive for debt investment than equity.

Utilities should reward equity investors similarly to debt holders. Pay a dividend or no-one will give equity to the utility.


Life is short. Live passionately.
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Ericsson
#153 Posted : Saturday, September 07, 2019 10:33:58 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,636
Location: NAIROBI
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.


Firms like ARM
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Ericsson
#154 Posted : Saturday, September 07, 2019 10:38:10 PM
Rank: Elder


Joined: 12/4/2009
Posts: 10,636
Location: NAIROBI
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.


That debt has been utilized well and enabled the firm to increase its market share of electricity generation even in the dry season when dams have low water levels.
This has had the effect of smoothening the revenue and profits,avoiding the wild swings when it rains,dams are full and during the dry season
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#155 Posted : Sunday, September 08, 2019 1:27:26 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,047
Location: Nairobi
sparkly wrote:
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.


High capital requirements and longer project pay off periods make utilities more attractive for debt investment than equity.

Utilities should reward equity investors similarly to debt holders. Pay a dividend or no-one will give equity to the utility.


But you said "High capital requirements and longer project pay off periods make utilities more attractive for debt investment than equity" so KenGen doesn't really need equity investors now vs long-term debt. Project debt through SPVs also ring-fences risk around a project.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#156 Posted : Sunday, September 08, 2019 1:30:59 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,047
Location: Nairobi
Ericsson wrote:
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.

That debt has been utilized well and enabled the firm to increase its market share of electricity generation even in the dry season when dams have low water levels.
This has had the effect of smoothening the revenue and profits,avoiding the wild swings when it rains,dams are full and during the dry season
That's good and has been 90%+ paid down will be completely paid off by Oct 2019.
I was talking of the future. Debt that comes due now.
Given KPLC is the #1 customer, if KPLC struggles in making payments, the cashflow problems escalate to KenGen as happened a few years ago and again last year.
The economy isn't doing too well and firms should try to lower their exposure to manageable levels.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#157 Posted : Sunday, September 08, 2019 9:24:42 AM
Rank: Elder


Joined: 12/4/2009
Posts: 10,636
Location: NAIROBI
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.

That debt has been utilized well and enabled the firm to increase its market share of electricity generation even in the dry season when dams have low water levels.
This has had the effect of smoothening the revenue and profits,avoiding the wild swings when it rains,dams are full and during the dry season
That's good and has been 90%+ paid down will be completely paid off by Oct 2019.
I was talking of the future. Debt that comes due now.
Given KPLC is the #1 customer, if KPLC struggles in making payments, the cashflow problems escalate to KenGen as happened a few years ago and again last year.
The economy isn't doing too well and firms should try to lower their exposure to manageable levels.


First charge/payment/expense of what kplc gets as revenue is;
-Debt repayments both local and international
-Second is Kengen
-Other suppliers then follow.

After Olkaria I Unit 6 that comes on board in 2021 is completd,kengen will take a break in bringing on board additional power.
This is to allow demand to bridge the gap with supply.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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sparkly
#158 Posted : Sunday, September 08, 2019 12:10:15 PM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
VituVingiSana wrote:
sparkly wrote:
VituVingiSana wrote:
Ericsson wrote:
VituVingiSana wrote:
Doesn’t KenGen have a lot of loans. Some may be concessional but doesn’t it make sense for KenGen to pay off the loans first before hiking the dividend?

Kengen in November will have successfully repaid the ksh.26bn bond taken in 2009 together with the 12.5% interest.
And they have also been paying dividends
Didn't KenGen go through a fund-raising via a huge Debt-to-Equity Conversion - done within a larger Rights Issue - not so long ago?

I am increasingly more attracted to firms that are dynamic but actively reducing their debt:equity ratios in these tough economic times.

KenGen has been paying off its bond over 9-10 years but it still carries a lot of debt as does KPLC.


High capital requirements and longer project pay off periods make utilities more attractive for debt investment than equity.

Utilities should reward equity investors similarly to debt holders. Pay a dividend or no-one will give equity to the utility.


But you said "High capital requirements and longer project pay off periods make utilities more attractive for debt investment than equity" so KenGen doesn't really need equity investors now vs long-term debt. Project debt through SPVs also ring-fences risk around a project.



Kengen needs capital but investors are more willing to give debt than equity. Infact debt exceeds equity by far.

Over 80% of shareholding of Kengen is Government and Quasi Government who don't really care if their investment is treated as debt or equity. Equity investment by Governmenet is really to make the balance sheet ratios look nice and assure the external debt holders that their debts will be re-paid.

Wanjiku equity holders like myself are just there for the ride alongside the big boys, receive goodies thrown our way once in a while and make alot of noise if dividend is not forthcoming.

Life is short. Live passionately.
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Extraterrestrial
#159 Posted : Monday, September 09, 2019 11:14:50 AM
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Joined: 11/17/2018
Posts: 173
Location: Mars
Someone has been dumping at sub 5.55. I wonder what it is they know...
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guru267
#160 Posted : Monday, September 09, 2019 3:42:45 PM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
Extraterrestrial wrote:
Someone has been dumping at sub 5.55. I wonder what it is they know...


You should be buying the rumour so that you are in the green when its time to sell the news.
Mark 12:29
Deuteronomy 4:16
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