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Total Q3 results point to a rosy outlook for KK
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mwanahisa
#21 Posted : Thursday, November 04, 2010 6:38:50 PM
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Joined: 6/2/2008
Posts: 1,438
@milken. I know the road system in TZ has been pretty awful, but how about the railway to Kigoma and Mwanza?
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milken
#22 Posted : Thursday, November 04, 2010 6:59:44 PM
Rank: Member

Joined: 4/25/2008
Posts: 192
Location: Nairobi
Currently, only Kenya companies can import petroleum products through Kenya (i.e. use the KOSF jeety and KPC). This means that even big companies (multinationals included)in Ug and neighbouring countries have to buy product from Kenyan companies or establish offices in Kenya) so as to receive product. This is how KK and other Kenya companies make money. They are big and are able to import huge quantities that ensure no stock outs, they can use the Kenyan pipeline system for storage speculatively and thus outdo other competitors in RW, Burundi and UG. In the eventuality that Kenya and neighbouring countries are to source product from Ug, then it will be a free for all with companies including small ones going for one truck in Uganda for their station.

This will lead to stiff competition and erosion of margins (small company=small overhead which will see KK not making the return they are making now.
Itari muting'oe ihuragwo ngi ni Ngai
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mwanahisa
#23 Posted : Thursday, November 04, 2010 7:03:20 PM
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Joined: 6/2/2008
Posts: 1,438
cnn wrote:
@mwanahisa,my EPS come to 1.98 against 1.72 at half year,which still shows .26 EPS for third quarter.The question is whatever caused the slow down in Total during the quarter also affected KK.Half year KK made .88 per share.Giving it the same third quarter performance to Total and in direct proportionality (a too conservative approach)the EPS drop to .13 for the three months and total earnings of 1.01 at third quarter.Throw in a good fourth quarter,KKs regional reach and a management which i like and full year EPS at around kSh 1.40 is possible.Where is your money?


I had forgotten to respond to this. Last year Total issued 123,478,000 preference shares which have all the rights that ordinaries have other than voting. I have therefore diluted Total's EPS in my computations.

My money is on KK. I have a 100 Total shares to be allowed into their meetings. They ocassionally serve alcohol at some of their shareholder cocktails, but these have been rather scarce of late!!
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milken
#24 Posted : Thursday, November 04, 2010 7:06:05 PM
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Joined: 4/25/2008
Posts: 192
Location: Nairobi
@mwanahisa. I know the road system in TZ has been pretty awful, but how about the railway to Kigoma and Mwanza?

Guys use Kigoma for DRC, Burundi and Rwanda (by road or barge).

Even if you moved product to Mwanza by rail, How will it move to Kampala about 900KM?
Itari muting'oe ihuragwo ngi ni Ngai
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mwanahisa
#25 Posted : Thursday, November 04, 2010 7:07:09 PM
Rank: Elder

Joined: 6/2/2008
Posts: 1,438
milken wrote:
Currently, only Kenya companies can import petroleum products through Kenya (i.e. use the KOSF jeety and KPC). This means that even big companies (multinationals included)in Ug and neighbouring countries have to buy product from Kenyan companies or establish offices in Kenya) so as to receive product. This is how KK and other Kenya companies make money. They are big and are able to import huge quantities that ensure no stock outs, they can use the Kenyan pipeline system for storage speculatively and thus outdo other competitors in RW, Burundi and UG. In the eventuality that Kenya and neighbouring countries are to source product from Ug, then it will be a free for all with companies including small ones going for one truck in Uganda for their station.

This will lead to stiff competition and erosion of margins (small company=small overhead which will see KK not making the return they are making now.


Thanks for this info. I will be honest and admit that I did not know that. However, even with the change, KK and others of their ilk will have better economies of scale due to their size. However, should margins thin out that dramatically, KK still has other territories in which to do business.
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mwanahisa
#26 Posted : Thursday, November 04, 2010 7:10:43 PM
Rank: Elder

Joined: 6/2/2008
Posts: 1,438
milken wrote:
@mwanahisa. I know the road system in TZ has been pretty awful, but how about the railway to Kigoma and Mwanza?

Guys use Kigoma for DRC, Burundi and Rwanda (by road or barge).

Even if you moved product to Mwanza by rail, How will it move to Kampala about 900KM?


From Mwanza to Port Bell, You could simply use the Lake. Note, I am guessing here as I not sure whether the infrastructure is in place i.e. steamers, oil jetties etc. Maybe, you know better.
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mwanahisa
#27 Posted : Thursday, November 04, 2010 7:14:54 PM
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Joined: 6/2/2008
Posts: 1,438
milken wrote:

1. What take over has KK been involved in to justify your outlook?


KK established a branch in Mozambique in July this year. I guess this is still at a nascent stage so it is unlikely to have made much headway as yet, but the Move South strategy is very much in motion.

I am not sure, but I think KK also went into Malawi this year.
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VituVingiSana
#28 Posted : Sunday, November 07, 2010 6:32:28 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Folks... the oil in Uganda will not start flowing for a few years! museveni wants another 7-year term coz he wants to kula [a typical corrupt african megalomaniac] once the oil starts flowing...

So even if the oil flows (earliest) in 2013, there is no refinery in Uganda... So KK will still export to Uganda through Kenya/Tanzania...

Even with a refinery (earliest 2015), KK will still remain a major player since it can import from Uganda to supply Zambia, DRC, Kenya, Rwanda, etc...

KK is expanding into Africa & expects to be present in 10 countries by 2013 [new ones on the radar are Mozambique & Zimbabwe] & Kenya will become a smaller portion of the much larger pie!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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guru267
#29 Posted : Sunday, November 07, 2010 10:03:04 PM
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Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
VituVingiSana wrote:

KK is expanding into Africa & expects to be present in 10 countries by 2013 [new ones on the radar are Mozambique & Zimbabwe] & Kenya will become a smaller portion of the much larger pie!


@VVS i'm watching the zimbabwe entry very closely because this is a key growth market they can't afford to lose though i know Mugabe is being bitchy with his indigenization policies..

By the way M7's term will be 7 years not 5...
Mark 12:29
Deuteronomy 4:16
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VituVingiSana
#30 Posted : Sunday, November 07, 2010 11:06:49 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
guru267 wrote:
VituVingiSana wrote:

KK is expanding into Africa & expects to be present in 10 countries by 2013 [new ones on the radar are Mozambique & Zimbabwe] & Kenya will become a smaller portion of the much larger pie!

@VVS i'm watching the zimbabwe entry very closely because this is a key growth market they can't afford to lose though i know Mugabe is being bitchy with his indigenization policies..

By the way M7's term will be 7 years not 5...
Erm, I did say 7 years... Not sure what you post you are referring to...
Zimbabwe may not be on the table for KK for 2010 or 2011 for now but there are others in the region...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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