Category Archives: ICDCI

March 31 Numbers

It’s that time of the year when the companies that have their year-end in March get to release their 2016 results. These include  Safaricom, Centum and Kenya Airways

  • Centum: The Two Rivers mall seems also complete, and there are the venture in banking (Sidian Bank) & fund management (GenAfrica, Nabo Capital), expansion in beverage (Carlsberg beer, Almasi – Coca Cola). They exited insurance, divested of some property, and have  other new ones to pay for (Amu Power, Vipingo estates). Are they will keen on coal energy? Plus it’s time for shareholders to get some dividends.
  • Kenya Airways: Maybe the toughest year of the company in its 39-year history. One of shrinkage after a record loss , with everything “on the table” as CEO Mbuvi Ngunze has often said. This has come to include board reshuffle, selling a Heathrow airport slot, selling/leasing off brand new aircraft  (787 Dreamliners, and 777-300’s),  and staff layoffs. What’s been the financial outcome of these moves?
  • Safaricom:  Unparalleled at the top of the corporate food chain in terms of connection with citizens (communications, security) and as a taxpayer, with no rivals except itself. Has M-Pesa peaked? What’s next?

It’s also time for banks to release their quarter one results for 2016, in an interesting  year, one not seen since the dreaded early 1990’s and mid 1980’s when political banks were in the news for the wrong reasons. Everyone is wondering, who will buy reopened  Chase Bank?

Almasi Gets Juicy

A year after Centum took control of K-Rep Bank, Almasi Beverages and Genesis Kenya, they are now seeking more shares of Almasi.

In December, they were reported to have made an offer of Kshs 6 per share to minority shareholders of Almasi, a sum that they term as a 20% premium to when the company was formed in 2013. Payment will be within 10 days of the closing date f the offer to shareholders who accept and provide original share  certificates.

This came after Centum shareholders had ratified the acquisition of an additional shareholding of  3% in Almasi (for Kshs 182 million) – resulting in Almasi Beverages becoming a subsidiary in which Centum holds an aggregate of 50.95% of the issued share capital.

$1 = Kshs 102.

Almasi & Coca Cola

Almasi, the holding company for three Coca Cola bottling plants (Mt. Kenya Bottlers, Rift Valley Bottlers, Kisii Bottlers), had 2014 revenue Kshs 6.7 billion (up from 5.8 billion) and a pre-tax profit of Kshs 516 million (up from 256M). The company, which is 51% owned by Centum Investments, will pay out a dividend of 0.12 per shares (total Kshs 92 million) to shareholders.

The company has installed a new, and faster, glass bottling line and will launch a plastic bottling one at Nyeri in 2016, in line with trends in the beverage business where plastic, not glass bottles, are the preferred buy choice by consumers.

Almasi distributed about 29% of the Coca Cola products in Kenya, equally spread by the three plants and they see the governments plans for Northern and Eastern Kenya where improvements in infrastructure (around LAPSSET) and security over the next few years as an opportunity to open up new markets for their products.

The company also has a few tax claims from the Kenya Revenue Authority, but the directors don’t feel they will materialize.

$1 = Kshs 102

Shares Portfolio August 2015

Comparing performance to last quarter and a year ago the portfolio is down 10% in the last three months, while the while the NSE 20 share index  is down 12% since May 2015.

The Stable

snoop

 

 

Atlas  ↓
Bralirwa (Rwanda) ↓
Centum (ICDCI) ↓
CIC Insurance  ↓
Diamond Trust ↓
Equity ↓
KCB ↓
Kenya Airways ↓
Kenya Oil ↓
Mumias ↓
NIC  ↓
NSE ↓
Safaricom ↓
Scangroup ↓
Stanbic (Uganda) ↓
TPSEA  ↓
Unga ↓

Summary

  • Everything is down this quarter!
  • In: Atlas, CIC Insurance, NIC, Equity Bank, TPSEA (Serena)
  • Out: None
  • Increase: Equity Bank
  • Decrease: None
  • Best performer: Kenol  (No change in three months)
  • Worst performer: Atlas (down 44%) ,KCB (down 24%), Centum (down 20%) Mumias

Unexpected Events:

  • Kenya Airways record loss.
  • Mumias and Uchumi have new CEO’s
  • Profit warnings at a half dozen Kenyan companies –  Car & General, Mumias Sugar, East African Cables, Express Kenya, Standard Group, and Uchumi.

Looking Forward To:

  • Safaricom’s dividend
  • KQ and Centum AGM’s

Lamu, Kenya and Amu Power – Part II

See Part I of the visit to Lamu with Amu Power

After the morning session with the county officials, we had a chance to visit the planned site of the Amu Power coal plant at Kwasasi, on the mainland. This was my third visit to Lamu in four years, but my first chance to visit the mainland of Lamu County.

The Lamu islands are incredibly beautiful, and once you experience Lamu, you are unlikely to look at Mombasa the same way again. It’s a beautiful place for tourists to visit; boat rides, the endless beaches of Shela, the quaint town with tiny streets, curio shops, friendly residents,  ancient buildings, tasty foods served on roof top restaurants, and a world heritage status conferred on the town.

Also for tourists who come to Lamu, unlike travel to Mombasa where they have to contend with at least an hour of traffic around both Jomo Kenyatta and Moi airports, they can fly to Lamu having skipped the traffic bit by using Wilson airport in Nairobi, while in Lamu, there’s no such thing at traffic – as you land on Manda island, walk 300 meters and get on a boat that can get you to a hotel or villa within ten minutes. But while it’s beautiful for tourists, life is not getting better for residents. The boat rides are expensive, unemployment is high, and education is low, and the land has other challenges.

Mainland jettyTo get to the Kwasasi site, we took a 15-minute boat ride to Mokowe jetty where several taxis were waiting. Mainland Lamu, which borders Somalia about 100 kilometers away, has been in the news over the last two years due to sporadic attacks and incidents, with the most catastrophic being Mpeketoni in June 2014, where 48 people were killed by a terror gang.

The first stop after stepping off the ferry on the mainland was to drive to the local police station to collect some armed policemen that the company had hired for the day. After that it was a long drive over about an hour that covered about 30 kilometers on narrow dry dusty roads. Lamu County is said to have 6 kilometers of tarmac, but this main road on the mainland had none.

Eventually, we got to a Navy base, which also marked the edge of the port area. This was our starting point and we drove along the fence of the navy base, which had a road then away from the fence with satellite tracking devices to pinpoint the coordinates of the corners of the site and this took about two hours to navigate. Amu Power had contracted a landscape architect to produce real life drawings of what the plant would look like in the current environment, and he took several pictures at each corner of the site and strategic points on the road.

Kwasasi 1The site of the plant was a large plain field with sparse bush. This was a shock as I expected to find warehouse sheds, office and residential buildings to mark the edge of a LAPSSET (The Lamu Port Southern Sudan-Ethiopia Transport Corridor) port city. But the place was sparsely populated and devoid of structures or developments.

This was apparently communal land, but there were sticks in the ground to mark boundaries in some places and burnt bushes in other places presumably for cultivation clearing. In some places targeted for LAPSSET projects, speculators in the area have pushed up the price of land five times in the last few years.

Another shock was seeing many women and girls walking along the road with yellow 20-liter drum, full of water. This is an arid area, with few water points and the role of fetching water is one performed by women who walk long distances. We later stopped at one of Amu Power’s CSR projects, which were a series of water tanks at a  central point to which a company lorry delivers water every week for area residents to use. It should not be the business of prospective investors to provide water, but that’s the reality of doing business in many parts of the world, and the water delivery has made life easier, with more to be done.

Hindi water pointAmu Power has plans for the construction of a water desalination plant, which will be the first ever, built in Kenya, and the excess of this will be shared with the local community.

We left just before sunset and asked the taxi driver about the ongoing curfew that was in the area. He said it was still in force, but had been relaxed of late.

After we got back to the Island we had a few more talks to recap the day. Earlier, one of the community leaders has  talked of the challenges Lamu had faced and why it had remained largely unchanged 50 years after independence with issues like  water shortages, transport challenges and lack of roads. He said, while Lamu was poor, there had been resistance to several past attempts to introduce development projects  in the area– including a fertilizer plant, the new port (because it would spoil fishing), and wind power in Shela (because it would spoil the water).

Kwasasi 2The day after the visit, as we prepared to leave and fly back to Nairobi, we started hearing reports of the ongoing attack at the university in Garissa. The full scale of the attack did not become apparent till later in the day.

It is expected that President Uhuru Kenyatta will be in the area in a few weeks to commission the first three berths of the Lamu port that is set to be completed in 2019.

The port, crude oil pipeline, the coal plant in Lamu and Lamu-Garissa-Isiolo Road will raise the profile of Lamu and thus the government’s investments to enhance the security profile of the area. The fringe benefits of this infrastructure will be to open up the Eastern and Northern part of Kenya to development and settlement, the way that the British railway did over 100 years ago between Mombasa and Kisumu.

Clearly, not only is change coming to Lamu, change has to come to Lamu. The LAPSSET projects and the coal plant are about 30 kilometers from Lamu town and the picturesque islands that most people in Lamu are familiar; that’s about the distance from Mombasa island to Diani beach and its possible that the two will coexist and mutually benefit like the South coast neighbours.