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Mumias Sugar Company Interim Results.
Rank: Elder Joined: 5/27/2008 Posts: 3,760
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@kiz,price increase doesn't translate to extra earnings. Sugar is an elastic good,as price increases,demand falls. The increased amount in the price is most probably cash for the middle man,not MSC.
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Rank: Member Joined: 5/6/2008 Posts: 13
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@ Gekko
If they are gaining nothing from the price increases then it'll be agood reason to sale and quick.
@ Mainat
The guys got PPA with KPLC @ 6 US cts per unit. This translates to about ksh 4.8 per unit. Assume they sale to KPLC 26MW. It translates like(assume 300 days operation)
26000*24*300 *4.8= 898560000
assume operational expenses of 398m,they get a cool 500M PTA. Unless to you 500M is not much
Kim
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Rank: Chief Joined: 1/3/2007 Posts: 18,099 Location: Nairobi
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Jana a sugar transporter told me that last year their trucks had to wait in line for sugar at Mumias (warias were paying kitu kidogo to jump the queue) to pick up sugar. Leo,there are NO lines. For big buyers,Mumias is hiring trucks to deliver sugar! Demand is DOWN: Drought. U can't buy unga. Ati,u will buy sukari? Supply is hampered by militant farmers: The farmers are their worst enemies. The push for higher cane prices which means smugglers are bringing in sugar from other countries. COMESA: Duty down from 100% to 70%. Sudan,Malawi & Swaziland have excess to sell to Kenyans. PLUSES: Electricity Generation: The cost is fixed i.e. free electricity from baggasse (waste product) & one-time cost of generation plant (except upgrades & maintenance) & additional labor costs. Otherwise PURE profit & KPLC will buy everything they can get! Efficiency: Mumias is the 2nd most efficient firm BUT... times are tough for Mumias! Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB 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: 18,099 Location: Nairobi
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If Mumias has forex loans... watalia tena! What currency did they borrow in coz if US$,they will have forex losses as well as increased interest payments. If GBP,then they are lucky but I think it is in Euros (PROPARCO being their partner). Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 2/20/2007 Posts: 359
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I am like the xter with the big sniff-nose in Rushdie's Midnight Children. So,I can sniff a ponzi or a conman with a biz deal from 5 miles away,but Mumias! The allure of sweet sugar blinded my unmarched sense of sniffing.
Mumias is faaaaaalling like 'Angel Gabrielle' in Satanic Verses,(Muslims,pls forgive me but to satisfy my intellectual curiosity,I do read indiscriminately) and is thus far - the worst investment decision I ever made,bought at 13 a yr ago,failed to cut losses b4 -15%.
Now am aloof-just-like-Baks and will do nothing as it falls angelically. Only consolation is that I only bought a small qnty. Kumbe sometimes idling is the better deal....!? Ahaaa. Lemme make make a cuppa,this time without sugar - to preserve my sniff-nose!
When buying shares,ask yourself,would you buy the whole company?
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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Started at 43 pre-bonus. Now @ 5 bob I've lost 50% in my 9,200 shares that I'm holding. Shud I buy more at sub 5.00 or sell at 5.50? Ecs 11.2 Give portions to seven,yes to eight,for you do not know what disaster may come upon the land. The opposite of courage is not cowardice, it's conformity.
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Rank: Chief Joined: 1/3/2007 Posts: 18,099 Location: Nairobi
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Why apologize for reading anything? Satanic Verses is not child porn. Most of the jamaas who were protesting against SV did not even see the book,let alone read it! And those who read it did not even understand it! A narrow mind is full of hatred. Broaden your mind & the world awaits you! Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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Todays Smart Company. Mumias attributed 73% drop to 1 month's inactivity,strike by farmers and transporters. But they will make up (i.e last year's sums) in the second half through the generation project which will bring US$1M each month from April (240M for 3 months). They made 230M in the first half. There is also US$10M to come from carbon credits. Loan repayments will eat quite a bit of the US$1M,but the carbon cash is all bottom line.
If Kidero's projections are correct,Ksh 4 a share is a major bargain.
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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Mumius has to be a bargain for long-termers They are quite determined to persue the TARDA deal and see it through,if this happens,the company will successfully turn the corner. About the power deal,any reason why they did not sell directly to KPLC? Why did they have to sell to KG (read middleman),who adds absolutely no value,marks up the cost,then passes it to KPLC and on to the poor Kenyans! I guess if you can't win with facts,you can always pen bile-laced,xenophobic rants to distract everyone. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Obi, Mumias sells to KPLC and not Kengen @Gekko, Power generation proper starts in late March or early Avril.....Factor in stabilising andpost commisioning tuning.....That takes you to end od April and leaves you with two months in this financial year....What impact would it make on books?....talk about next financial year but i totally agree...........At 4 bob......they don't come better. Guka wa bijuti... Nothing great was ever achieved without enthusiasm.
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Rank: Member Joined: 2/12/2008 Posts: 345
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Core business please. Identity of a company is in its core business! ..n for mumias..that is agriculture..and sugar at that! Tarda or none..mumias will not chart a path kengen has not. I do hop they pull a brand change and very soon..push sugar to peripheral n go large on elec,ethanol etc..cede ground in sugar to sony and others..while growin other ventures. Change in core business..in brand..in name. Atleast it would be a more relevant than it was to icdc. Otherwise..harping the tarda thingy as reason to buy or hold is faint hope. Haiwesmek. How do u explain.. 'I'm buyin a sugar company on basis of electricity generation.!'
The race is not always to the swift..nor the battle always to the strong..nor food always to the wise..nor riches always to the intelligent..favor is not always to the skilled..or learned..but time and chance happens to all. Ecl9:5..
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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'I'm buyin a sugar company on basis of electricity generation.!'...... @Jammo, The term is CoGen.....Not power generation and there is a huge difference between the two.Of course you understand very little about the sugar industry and it's potential.I trust you to keep reading. Guka wa bijuti... Nothing great was ever achieved without enthusiasm.
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Rank: Member Joined: 3/20/2008 Posts: 503
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Power gen or Cogen,I agree with Jammo. It is still a sugar company and until they sort out the uncontrollable issues listed earlier in this thread,this stock should be looked at in the same way as the other agricultural stocks. Eg where will the mollasses come from while the cane is still destroyed by irate farmers. There will still be no point in producing ethanol at extremely high costs.
beware the irrational exuberance on the NSE
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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@ Njung'e,thanks for the clarification,i think the media has been mixing their facts,I read somewhere that the agreement was with Kengen. Its good they are selling directly to KPLC and obviously getting good returns. @ Jammo,I have noticed there are some counters that you can't be objective about. Mumias has been performing well historically and to write them off as another agricultural is shortsighted. Energy is a problem area in Kenya and anyone who is in it is bound to make good returns,try and read about sugar/cane/energy axis esp. in Brazil,this will give you a clear understanding of the Mumias Sugar potential. You talk about core business,I talk about maximising returns by diversification. And finally the at TARDA,mumias will be able to plant their own cane,this will eliminate the cane farmers menace They have one of the best MD's in Kenya and I like the way he goes about quietly growing the company. He will get the TARDA deal,then we shall see who was right. I guess if you can't win with facts,you can always pen bile-laced,xenophobic rants to distract everyone. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Member Joined: 2/12/2008 Posts: 345
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@njung'e & obi... You r probably right.. My approach is return on my shillin put in today...on turnover for 09. I hav the whole future,God willing,to learn about mumias..but a year to make atleast 100% returns on a shilling. If economy is to grow by 4% this year..which is 100% last year..it's fair my portfolio reflect that..or better. Mumias is not in that league. For me..jus me.
The race is not always to the swift..nor the battle always to the strong..nor food always to the wise..nor riches always to the intelligent..favor is not always to the skilled..or learned..but time and chance happens to all. Ecl9:5..
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Rank: Member Joined: 10/5/2007 Posts: 91
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...what messes this stock is lack of a website...a nice one like Obama's...for investor relations...
...I read somewhere in archives that MSC hit the ground in cruise speed in 1973...with sugar leaving factory straight to houselholds same day...repaying GK and Mr Booker's capital outlay in just 18 mths (beat SCOM!). It still operates in a sugar deficit market...so what's the problem?
Hey...Somebody might make a killing out of me...?!
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Rank: Member Joined: 11/8/2006 Posts: 2
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Anyone heard about the international shortfall in sugar output,which is likely to rally a bull run in international prices of the commodity due to increased demand. If MS decides to export its produce (shortfall last 6 months only due to pricing and payment differences between farmers and MS),it should manage to beat last years results even without including input from electricity production. They have the production capacity and have sorted out their differences with the farmers. Wats your take????
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Rank: Member Joined: 11/19/2009 Posts: 3,142
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Is sugar golden?
A lapse is more dangerous than a blink
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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When do we expect the full yr results? Crocodile tears: If you can't assist me when I'm alive en you attend my funeral. The opposite of courage is not cowardice, it's conformity.
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Rank: Member Joined: 6/4/2008 Posts: 345
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Results are out. Up 31% due to huge tax credit arrising from capital deductions from power palnt.
'You can fool all the people some of the time,and some of the people all the time,but you cannot fool all the people all the time.'
Abraham Lincoln.
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