Blog Archive

Thursday, September 28, 2006

KPLC announces 2005-6 Results

KPLC reported a higher profits for 2005-6 (y-o-y):

Year End: 30 June 2006

Sales (Net): KES 22.5 Billion (+3%)

PBT: KES 2.5 Billion (+25%)

PAT:KES 1.64 Billion (+29%)

Taxation: KES 48 Million (+20%)

EPS: KES 20.78 (+29%)

Dividend: KES 1.50 per share

Units sold were 3% y-o-y but that is lower than GDP (+5.8) growth which indicates there may have been "transmission" constraints while prices were higher than 2004-5. KPLC passes through all fuel-cost recoveries but lower fuel costs in 2006-7 (hoping the current lower oil prices remain, well, low) will be beneficial as more customers hook up to KPLC's network.

Future prospects seem good if the economy continues on its current growth, fuel prices remain steady (or drop) & increased efficiencies in transmission. There is a new management team in place from Manitoba Hydro International.

A major issue/challenge remains the rate hike that KenGen wants but will impact KPLC unless it can recoup the increase from its customers. This is unpopular since Kenya has among the highest electricity costs among major African countries.


Kudrinketh said...

I think the market is finally realising that KPLC is a shell. It shed 19% today, i expect more drops after the price reprieve is approved probably in november just before the kengen AGM.

I'd say stay away from KPLC until they can demosntrate that they can get new customers.

gathinga said...

KPLC has so much unrealised potential. By only reducing system losses by say 5% from the current 20% they could add apx 500m to their bottom line.

And the demand for elec will always be on the upswing, problem is the suply side which they appear to be addressing by appointing manitoba. This is in direct contrust with the probs of ohter corps. like eabl, bbk, etc whose probem is to create more deamd/ market share.

because of this, both kplc and kengen are gems and institutions will continue to seek them. i think the slump on kplc is a short term issue

coldtusker said...

1) It is very difficult to reduce losses to 5% unless your distribution area is very small.

2) The further the transmission/distribution distances, the higher the losses (conduction loss).

3) I think 15% is the best they can do but that requires substantial investment in better/newer transformers & new cables.

4) A major problem is electricity theft which leads to further losses by damaging the cables.

5)Manitoba CAN'T create additional supply. They might be able to plug the financial loopholes & HR issues.

6) Huge number of preference shares that could be due for dividends depending on KPLC's profits.

7) Prices & values on the NSE are not correlated!