KQ's 9-month 2008-9 PBT was +7% vs PY... BUT the real story is that...
KQ made 2x in 3Q (Kes 3.035bn PBT) compared to entire 1H (Kes 1.05 PBT)...
Due to the post-election violence, KQ's pax numbers were very low in 1Q (Apr-Jun 2008). The 2Q (May-Sep 2008) was merely catch-up but the after-effects still lingered.
Then came 3Q with (much) lower oil prices as well as the strong US$... but since KQ prices most tix in US$, the overall effect has been a surge in Kes profits...
KQ faces challenges in 4Q coz of the GFC but the most profitable business remains the African business... they should continue expanding in Africa even if it the destinations make losses at first... KQ should start agrressively targetting S. African markets & beat up SAA while they are down!
Oil prices should be lower than 2008 though we have seen jet fuel shortages in Kenya coz of the thieves at KPC.
BOTTOMLINE: I expect EPS of 7.50 for 2008-9. By my estimates the NAV is over 62/- So its trading at P/B of 0.4 and forward PER of 3.5... this is a steal!
And there is the Obama business... perhaps time expedite the expansion of the Kisumu airport... Obama is a-coming at some point!
Prior posts on KQ or related subjects...
http://coldtusker.blogspot.com/2008/10/kq-has-profitable-1h-2008-9.html
http://coldtusker.blogspot.com/2008/11/jkia-is-dump.html
http://coldtusker.blogspot.com/2008/11/how-kenyan-government-sabotages-success.html
True true, the African business remains the best bet.
ReplyDeleteThe competition on the key Amsterdam route may get a little tougher with Delta coming in and pricing remains an issue.
My fwd projections are a lil' lower than yours though.
At 28/- & a conservative EPS of 5/- (for 2008-9) means a PE of <6.
ReplyDeleteBUT I expect the price to rise based on their cash, NAV & profits.
I am looking for the 'official' announcement... have you seen it?
(I have not read today's paper yet & the NSE is closed)
CT-The story is in the DN.
ReplyDeleteKQ definitely has the African business figured out. An added bonus is many of these destinations probably don't care about customer service :-)
KQ's reputation will always be affected by the KAA. Every time I go to the JKIA, I am always left with questions.
ReplyDeleteI have seen smaller airports that are better managed.
KQ has a good future that is if there are not safety concerns that may come to haunt them.
MainaT: KQ is ONLY choice in some destinations!
ReplyDeleteEK: I agree! Entirely... pisses me off... Did you read my earlier rant about JKIA & KAA?
I wish JKIA were privatised & KQ should have its own terminal (50% of JKIA's business is from KQ).
Njuguna: Why don't you help muhoho-ho-ho with his CV coz in 2013, he needs to look for another job!
ReplyDeleteMainaT: I can't find the KQ story in the 'paper' DN or an official announcement...
ReplyDeleteWhich date & page is the story on?
KE: If you read this, the WP spam catcher is proving troublesome. I have not been able to post.
ReplyDeletehttp://www.nation.co.ke/business/news/-/1006/521806/-/j2gls4z/-/index.html
ReplyDeleteMainaT: That is the online version. I am looking for the 'written' version.
ReplyDeleteEven better the ACTUAL announcement from KQ. I want to know more about the numbers behind the numbers.
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