mlennyma wrote:Spikes wrote:mlennyma wrote:Kausha wrote:There is expectation that the KPC will be settled out of court by July. They are already in discussion. Though this is with lots of hope. The money from TZ already came but it was only 1.68B.
source??or its gossip
People are taking advantage of KK mantra to spread skewed rumours and mere gossip .
it is however good if they can exploit the out of court settlement way to avoid bad blood between same sector members
KK is fairly priced at 12-14.
The fuel market has been favorable to the company. Lower cost per litre increased the margin per litre sold, reduced the cash outlay needed to buy stocks. When international prices start rising this advantage will vaporize.
KK still operates in a regulated market. Apart from protecting margins (discussed above) saving SGA and Finance costs is the only viable means of improving profitability. KK started by retrenching employees. Sold assets to reduce debts. Scope for operating cost reduction is almost done.
From 2016/7 onwards, operating profit growth can only come from increasing volumes while holding Capex steady, by growing a franchise model of stations and convenience stores.
Political risk still high for KK. Mainly held by Kanu men who have not found favour with subsequent regimes. In fact I am surprised that KK has survived this long with loss of favoured position, liberization and controls in the sector, Devani Triton antics.
That KPC (GOK) will pay the disputed amounts to KK with a clean heart is a tad too optimistic. If it happens, you can expect 70% of the cash to end up in Hyenas pockets. Not sure if our Messiah Ohana is open to such deals.
In conclusion all powers in the Cosmos are against a KK outperformance post 2016. This is a share to sell when the bulls return and put the money elsewhere, even T Bills will yield more.
Life is short. Live passionately.