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Mumias Sugar huge demand
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smallfama
#1231 Posted : Thursday, February 12, 2015 3:54:14 PM
Rank: New-farer

Joined: 8/15/2010
Posts: 99
Location: nairobi
This Mumias will be another KMC. Always begging for money from Govt. It's funny how private companies are able to compete in this sector yet all parastatals are crying to the govt for cash and after getting it the managers hire their kins without any thoughts. This is a classic example why govt shouldn't involve itself in running of businesses...it should only be in critical sectors such as energy
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streetwise
#1232 Posted : Thursday, February 12, 2015 6:02:43 PM
Rank: Veteran

Joined: 6/23/2011
Posts: 1,740
Location: Nairobi
Let me ask you a partnet question. Every one complaints loacal sugar is expesive and it is true MSC is.

MSC retails at a mergin higher than other brands yet the shoppers prefer the more expesive MSC . What doe this tell you
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Mucene
#1233 Posted : Thursday, February 12, 2015 6:07:57 PM
Rank: Member

Joined: 8/4/2012
Posts: 155
Location: Kenya
lochaz-index wrote:
VituVingiSana wrote:
Rollout wrote:
Kausha wrote:
Rollout wrote:
PE should buy Mumias for 60% discount, what's the current EBITDA for Mumias, anyone knows? Buy Mumias at 60% discount, institute new management, file bankruptcy, turn it around and then exit in approx 5 yrs. GOK will not be able to fix it.

Describe what disc you are talking about. Mumias has no EBITDA. Been making huges loses past 3 years.


It's math! Even a negative valuation with still have a discount, the EBITDA could be negative but Mumia value is not negative.
Without GoK support, subsidies and bailout, MSC is bankrupt.


Negative value is when liabilities>assets, I haven’t crunched the numbers for mumias but based on the reports available if its not at negative value currently then its very close to it.


MSC has a NAV of 6.96/= (2013 - 10.2/=), so it still has value but the losses are reducing it very fast.

The major problem with MSC is its ability to generate cash, hence its liquidity,considering it only generated Shs 801m from operations and has a current ratio of 0.41. Its production efficiency also needs to improve a lot since it has a gross profit margin of 6.49% (2013 - 13.06%).

But again am talking of a company with no fraud and corruption issues here. Put those into perspective and consider the fact the management still thinks its ERP system is very strong, then only the statement of NAV holds. It could be efficient in production but but margins are reduced by diverted products which account for cost of sales but no actual sales to be booked.
If you don't want to go to plan B have a good plan A.
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VituVingiSana
#1234 Posted : Thursday, February 12, 2015 6:21:52 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
@mucene - If the NAV was 7/- [30 June 2014] then it has been eroded rapidly since. I doubt the 1H 2014-15 results will show a profit. KPLC is demanding a huge payment [Capacity Charge] from Mumias. If KPLC took Mumias to court then that would be another black mark. Add the accumulated interest from the lenders since June 2014 as well.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Mucene
#1235 Posted : Thursday, February 12, 2015 7:55:30 PM
Rank: Member

Joined: 8/4/2012
Posts: 155
Location: Kenya
@VituVingiSana: MSC will definitely show a loss in the 1H14-15 results, so the NAV will be eroded further, lets wait and see what the current actions we're seeing in the media that the management are undertaking to stem fraud will do to the financials ama its all talk.
If you don't want to go to plan B have a good plan A.
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Aguytrying
#1236 Posted : Thursday, February 12, 2015 10:50:00 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
we even have examples. HFCK and KCB had similar problems, Gov stake reduced (hfck 3.6%). The problem went away. that's the ONLY solution for mumias.
The investor's chief problem - and even his worst enemy - is likely to be himself
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streetwise
#1237 Posted : Friday, February 13, 2015 8:30:48 AM
Rank: Veteran

Joined: 6/23/2011
Posts: 1,740
Location: Nairobi
Let the Gova clear the debts then go away. The benefit is the Gv will sells their stake and make some money, the co will be left alive and the fellow who took the risk will become rich. This is the only way to produce all winners.
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HaMaina
#1238 Posted : Friday, February 13, 2015 8:49:34 AM
Rank: Veteran

Joined: 4/23/2014
Posts: 931
Now this is what should have happened long ago.

DPP Keriako Tobiko now weighs in on Mumias Sugar scandal probe

http://www.standardmedia...as-sugar-scandal-probe/
“You can get in way more trouble with a good idea than a bad idea, because you forget that the good idea has limits.” - Ben Graham
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Njung'e
#1239 Posted : Friday, February 13, 2015 10:34:29 AM
Rank: Elder

Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@Mawinder,
Who are the other 12 suspected thieves?
Nothing great was ever achieved without enthusiasm.
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Sufficiently Philanga....thropic
#1240 Posted : Friday, February 13, 2015 2:19:53 PM
Rank: Elder

Joined: 9/23/2010
Posts: 2,225
Location: Sundowner,Amboseli
Bullish breakout in January,exit volume of 81.95M shares, at a record high 0f 3.85. Entry volume of 60.09M (smart money) was in November. Currently trading below SMA(20)2.977

@SufficientlyP
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  | | Edit by user: Friday, February 13, 2015 2:23 PM | Reason: Not specified
299 Pages«<122123124125126>»
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