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Kenya Airways posts Ksh 6.9 billion pre tax profits

Kenya Airways, East Africa’s most respected company has announced today a pre tax profit of Ksh 6.9 billion for the year ended March 31st 2006.
The after tax profit has risen by 24% from Ksh3.88 billion the same period last year to stand at Ksh 4.8 billion.
The airline has recorded a Ksh 52.8 billion turnover up from Ks 42.2 billion same period last year representing a 25% increase.
Earning per share before tax and minority interest stood at Ksh 15.06 up from Ksh 11.95 from the same period last year representing a 26% increase.
Earning per share after tax and minority interest stands at Ksh10.45 from Ksh8.40 representing an increase of 24.4% from last year.
Passenger growth went up by 17% to stand at 2.4 million, dividends went up 40% to Ksh 1.75 per share. Breaking the passenger increase into regions, Europe showed a 20% increase due to the success of the B777 aircraft, which currently number three in total.
The airline expects to take a delivery of a fourth B777 in early 2007 in addition to the three new B737-800 planes by the end of 2006.
The strongest growth was registered on african routes with West and Central Africa leading with 26% growth folowed by Southern Africa, Nothern Africa and Eastern Africa at 22%, 21% and 5% respectively.
During the same period, cargo volumes registered a substancial growth of 24% mainly due to more cargo space available on the larger B777 aircraft and increased frequencies of B767 in Africa.
Managing Director Titus Naikuni said the airline had manged to achieve sustained growth in profitablity despite increased competition and high fuel prices.

KENYA’S ECONOMIC SURVEY FOR 2005

The Kenya Economy survey for 2005 was released yesterday and as excepted the government was patting its back as it reported an impressive 5.8 % growth in 2005.
The performance as reported has not been experienced for the last 10 years.

ECONOMIC OUTLOOK FOR 2005

STATISTICS AT A GLANCE

EMPLOYEMENT
458,000 NEW JOBS, representing a 5.9% increase.

HEALTH
4,912 FACILITIES

EDUCATION
7.6 Million enrolled in school

TOURISM AND HOTEL.
Grew by 13.3% to earn Sh48.9 Billion in 2005 compared to Sh38.2 billion in 2004.
1.5 million tourists arrived in 2005 compared to 1.4 million in 2004.

AGRICULTURE
Grew by 6.7% compared to 1.4% in 2004. coffee production declined by 6.6% from 48,400 tonnes in 2003/04 to 42,200 tones in 2004/05.
Horticulture exports grew by 19.2% in 2005 injecting sh38.8 billion from 163.2 million tones compared to sh36 billion in 2004.

Maize production increased grew by 11.4% from 29 million bags 2004 to 32.3 million bags in 2005.

Wheat production grew by 45.8% in 2005 to net 128.7000 tonns

Tea production increased from 324.6,000 tons in 2004 to 328.5,000 tons in 2005.

Rise Production grew from 47.6 thousand tons in 2004 to 62.7 thousand tons in 2005.

Pyrethrum production dropped from 41.9 tons in 2004 to 16.4 tons in 2005.

MANUFACTURING
Grew by 5% compared to 4.5% in 2004. it created 5,500 jobs compared to 2,200 in 2004.
Leather and footwear sub sector declined by 4.3% in 2005 compared to a drop of 24% in 2004

BANKING SECTOR
Pretax profit by 47.8% to stand at sh20.1 billion in 2005 compared to Sh13.6 billion in 2004.

Interest income rose from Sh26.3 billion to sh39.7 billion.

Banks lending to private sector grew stood at 294.9 billion representing and increase of 18.5% in 2005.

Borrowing by manufacturers dropped to Sh62 billion from Sh63 billion in 2004.

Public sector lending dropped from Sh14.8 billion in 2004 to Sh13.5 billion in 2005.
Non interest income from fees and commissions grew by 17.85 to stand at sh19.9 billion compared to sh16.9 billion in 2004.

BUILDING AND CONSTRUCTION
Cement production rose by 10.9% in 2005 to stand at 1.5millom tones compared to 1.4 million tones in 2004.

TRANSPORT AND COMMUNICATION
Grew by 16.5% to earn the country sh329.9 Billion in 2005 compared to Sh283.2 billion in 2004.

Mobile phone industry subscription base grew by 56.9% to 5.6 million in 2005 compared to 4.3 million in 2004.
400 million sms’ were sent from the Kencell and Safaricom in 2005.
Newly registered motor vehicles rose from 42,482 in 2004 to 45,653 in 2005.

Its time China joined the Group of Seven

Two weeks ago, the Chinese government announced that it would be building more than 40 new airports and develop 10 new sea port facilities by 2010 in anticipation of a rapid demand for the transport infrastructure by its ever expanding manufacturing industry.
This news comes in the wake of reports that China has leap flogged Britain as the world’s fourth largest economy. China’s economy has been growing at a steady rate of 9.5% for the last two decades to stand at £1.13 trillion (R12.6 trillion), putting it a whisker ahead of the UK’s economy, which weighed in at £1.11 trillion according to official exchange rates used by the Bank of England.
Goldmans Sachs forecast they would enjoy strong growth over the next 30 to 50 years, by which time only the US would still be ahead on pure size.
In its analysis it says the leading economies by 2050 will be as follows in terms of GDP

1. China $44.5 trillion
2. US. $35.2 trillion
3.India $27 trillion
4. Japan $ 6.7 trillion
5. Brazil $ 6.1 trillion
6. Russia $5.9 trillion
7. Britain $3.8 trillion World’s largest economies in 2050

With these figures in mind, is it time for China to join the group of seven and replace the lesser country Canada? I guess its time we let the dragon in.
Click Here for more about China according to CIA

Its good news for Daima bank depositors

If news by the Central Bank of Kenya that depositors of the liquidated Daima Bank should collect claim forms in order for the liquidator to pay them the protected deposits, then there is light in the tunnel for the depositors of other fallen banks like Trust bank and Euro bank who have lost Millions of shillings.
Daima Bank which began operations in January 1993 then later put into statutory management in March 2003 under Simon Ngeny, had a deposit base of Sh709 Million with a gross loan portfolio of Sh934 million out of which Sh737 million of the total loan portfolio was non performing.
CBK says that payment is set to start on Monday next week and will run for one year till the last day of May next year.
Though CBK then said the Daima Bank’s loan portfolio was due to poor risks assessment and high interest rates that led to the massive default, one cannot rule out the malpractice that marred the banking sector in the previous regime.
We hope the government will look into the matter of other depositors who have lost their livelihood to the unscrupulous banking institutions

KenGen: At Sh45, the bubble won’t burst

The KenGen share has made a mark on its first day of trading at the bourse to trade Sh45 proving pundits who had predicted a price of about Sh25 wrong.
It is a suprise start and I may bet with the pessimists that the share will not fall below this mark. People are hungry for money and and want to repay the borrowed cash especially the first timers.
As we have seen, there is a massive order for the KenGen share from the disappointed applicants meaning the demand is still high.
So, lets brace ourselves for a Sh100 mark by next week

KenGen Shares to begin trading in under 12 hrs as prospects brighten

Finally, the KenGen shares start to trade at the Nairobi Stock Exchange in just under 12 hours and pundits are predicting a tense and an unpredictable future for its share price.
One analyst, Bankelele, in his market watch analysis is cautioning investors from selling their shares too soon in the hope of making quick money.
Well, like any other speculator, Bankelele might be right but the question is: Will the KenGen share rise above Sh11.90 and join the league of Kenya Airways, Kenya Commercial Bank and other blue chip companies as many investors have hoped for?
Some stock brokers are predicting an increase of over 100% in per share price to around Sh.24 once it starts trading tomorrow at the bourse.
According to the lead transaction adviser Mr. Vishal Agarwal, the true worth of each share is Sh95.20 since the share was split 8 times so as to avail more shares to the public. This, as we have experienced, did not solve the equation as the number of applicants rose to an unprecedented over 270,000 representing an oversubscription of over 337%.
There are two likely scenarios that are likely to happen with the share price once it enters the secondary market tomorrow.
The share price might rise once the bell rings at the bourse to as high as Sh.50 until it corrects itsself, but its future is uncertain. The demand for the shares is great as it has attracted immense interest from the local and foreign market which saw the amount raised stand at over Sh.26 billion.
With only 6,431 shares, the 22,707 institutional investors who had applied for the shares might opt to do away with their shares at a price only enough to redeem the cash they have invested as allocated by the Capital Market Authority(CMA).
If this happens it is likely to send the market into panic bringing the share price tumbling down or stagnating.
Another scenario we might experience is a situation where the big investors, both institutional and individual, will offer good cash for shares floated at the bourse at any price hoping to make a kill later. This might skyrocket the shares to unprecedented levels and we might see individual investors who had taken soft loans from the banks or borrowed their cash sell off their shares to the big investors.
However, banks might have the last laugh as with about 10% of the money having been borrowed, we might end up seeing the banks being the largest single shareholders at KenGen with people unable to repay their loans offering back their shares which was the only form of security.
For a company that announced close to Sh.2 billion in profits and issued dividend to the government, the prospects of KenGen are bright. With the energy sector likely to spur in coming years as the demand for power keeps on rising, KenGen shares area must have a long attractability to them. With other related shares (EA Cables, KPLC) rising by the day, KenGen will follow the EABL scenario where shares were split to make them affordable to the Kenyan investor.

Let KBC be

The recent “transfiring” of Wachira Waruru from the Kenya Broadcasting Corporation to the newly formed Kenya Film Commission (KFC) has once again brought into question the government’s willingness to guarantee press freedom.
First it was the attack on the Standard Media Group which set a precedent for the attack on Hope FM and now the exit of WW, as Waruru is popularly known, from the KBC.
With a massive defeat at the referendum, by-elections coming up in five constituencies and the General Election around the corner, all fingers points at the government as Kenyans sense a sinister motive in this change.
As evident at a plenary session held at the Kenya School of Monetary Studies on January 20th, 2006, key government functionaries, led by Education Assistant Minister Beth Mugo questioned KBC’s role in supporting the government.
What the officials were questioning was the KBC’s apparent failure to front their political agenda at the expense of the opposition which was getting equal coverage on the national broadcaster.
While we agree that as a national media house, KBC should air the government’s agenda where necessary, the matter raised by the government was an old time joke which should not be allowed to happen to find any pride of place today.
What the likes of Koigi wa Wamwere, Beth Mugo and other Kibaki cronies should understand is that the role of KBC is to inform, entertain, educate to all people regardless of their age, religion, tribe and not act as a government’s mouthpiece on some unmarketable and silly government’s political interests.
KBC should be left to run independently and not act on the whims of some people. With his checkered experience in the media, Mr. Wamwere should not as reported in the section of the media order the management or dominate in political programs as evident. Mr. Wamwere is on record for demonizing the Moi regime for interfering with the national broadcaster.
KBC is already basking in glory with popular programs cutting across the section of the society in offing. With Makutano Junction popular with the younger generation and Grapevine, KBC is a must for all.
The station is the leading one in sports coverage, way above all the private media house in the country. The station boasts of Yawezekana, a program airing the government’s achievements in the economy, politics and society.
KBC for the first time is being monitored by the other competitors and we should not let this few selfish people spoil the broth

Nakumatt’s PR stunt in the guise of market education

Flipping at today’s newspapers (May 10th 2006) both The Standard and the Nation, I was triggered by a strategically placed advert by arguably the largest and the fastest growing retail shop in Kenya, Nakumatt.
The advert placed on page one of The Standard and page three on the Daily Nation (those who are familiar with advertising can understand why this pages) inviting participants to attend a leadership exchange forum to explain on the secrets behind the success of the East Africa’s most recognized service company.
The company has a kicker saying “Man’s mind, once stretched by an original idea, never regains its original dimensions!”
A rule of thumb as widely known by the PR specialists and the Communication experts reads like, when faced with a crisis, never call a press conference like our politicians do, but rather create an event and reading in between the lines, this is exactly what Nakumatt is inviting participants to explain their success.
This event comes on the backdrop of a major threat to the brand after MPs in Parliament questioned the activities of this company. On a story reported in our print media and the electronic media, the company has been accused of massive tax evasion through the little known Charter Bank. This came long after report from the public domain had been emerging and circulating through the news corridors questioning the Nakumatt’s dealing and their massive expansion.
The MPs told the floor that the company has been sending millions of shillings abroad on a weekly basis and paid peanuts in terms of taxes to the government. The MPs led by Shadow Finance Minister Billow Kerrow alleged that the company, associated with Harun Mwau was being financed by drug money.
These sentiments by the members of parliaments brought the operations of the chain store into question with details from the Central Bank of Kenya through the press saying that the anti fraud unit at CBK had unearthed a massive money laundering and that the former CBK governor Dr. Andrew Mullei had requested the minister for finance to close the bank.
From these, is the company trying to reclaim its slightly tattered image? From the backgrounder, the management must have realized as they are trying to tell us through their advert slogan, a man’s mind once stretched by an original idea, never regains its original dimensions”
It is from these allegations that the company might be trying to clear the air and rub off any doubt in their customers’ minds.
The company might be in a fix and it’s trying to clean its linen in the guise of educating us on the secrets behind the success of Nakumatt.

Zuma guilty in the public court of opinion not in a court of law

South African Judge Van der Merwe referred to the poem If by Rudyard Kipling when acquitting ANC Deputy President Jacob Zuma saying if Kipling had known of this case at the time he wrote his poem, he might have added the following: “And if you can control your body and your sexual urges, then you are a man, my son.”
That word of wisdom to the ladies especially, summed up the whole trial in acquitting Zuma whom many, especially the anti Aids campaigners had hoped that the former second most powerful person in SA would go to jail.
Judging from the uncalled hullabaloo created even from the remotest part of this world, Zuma was only guilty in the public court of opinion but not in a court of law.
The bench in the public court of opinion had longed sent Zuma to jail saying he deserved not less than a jail sentence.
In his six hour ruling, the judge said he had no doubt that the two parties had a mutual consent when having sex meaning the lady had not been raped. Reading in between the lines, Zuma is guilty only because he was the second in command in SA.
He is only guilty because he headed the National Aids Council which advocated for the use of condoms in its campaign to fight the pandemic. Having gone against the will of people where he was supposed to lead by not only words but examples, Zuma was demonized.
His critics had one thing in mind, send Zuma to jail and it will serve an example to the rest which is unacceptable.
What if the lady was not infected with the virus would the case have created such debate? The verdict we can set here is had Zuma controlled his sexual urges which many are unable to do before they had an affair and used a condom he would only be accused of having an affair.
There is no difference between Zuma and the likes of Bill Clinton, Charles Clarke and many more people who have been overwhelmed by their sexual desires.
Zuma’s critics should understand that he was doing it at his own risk, he never infected anyone and what the lady is suffering from is guilt of having an affair. To the lady, Zuma was a family friend but to Zuma just like many men, there is no term like a family friend.