the deal wrote:there is someone on wazua who said he cant touch KQ because of the hedges...he said he is an accountant...where are you....what did the KQ management mean when they said they have adopted short revolving hedges...i think this mombasa shuttle where they dont makeThe money was created to hoodwink us with passenger numbers...i expect bz year end for overheads to shoot through the roof..can they retrench or make a salary freeze cos the margins are getting lower...
I was the one who said that the KQ figures dont look good at all.
The problem with most guyz is that they always focus on revenues and EBITDEA while making investments descisions and yet in real sense its the EATOS and the dividend yield that actually matters.
By the management telling us that the have adopted short revolving hedges they simply mean that they have opted to take hedges that are of a short tenure and when it matures its booked again thus the revolving nature.
Previously the hedges KQ were taking were long term in nature thus it was very hard to renegotiate with the financiers incase there were major changes in the price per barrel of oil therefore they had no option than to bear the loss in case of a major price flactuation below the hedge price and thats why KQ would make big hedge loses.
However with the short revolving hedges ,which was a good move if i may add ,i expect that KQ "MAY" be able to reduce there hedge losses.
But in my opinion the costs that KQ incurrs are quite high and i expect them to increase even further considering that the fuel price is increasing and also with their expansion strategy for sure the wage cost will be no joke and considering that it takes quite sometime before a route break evens and starts making profit i see tough times ahead for KQ.
This share is definately for the strong hearted.