Barclays Bank and Stanbic Bank Financial Results
Barclays Bank of Kenya (NSE: BBK) released FY16 earnings figures which saw net operating income before provisions record best performance since 2011, up 6.8% y/y.
Other notable highlights noted; FY16 EPS was down 11.9%y/y (-6.5% q/q), DPS unchanged at KES 1.00, loan provisions up 122.4%y/y whilst Net interest margin (NIM) remained stable y/y.
The bank posted positive NIR performance (+3.3%y/y). Furthermore, balance sheet indicated growth (advances +15.9%y/y (+6.1%q/q), deposits 7.9%y/y (-1.5%q/q)). Higher than historical cost growth (+8.2%y/y). was also notable. At a P/B of 1.2x, the stock remains attractive.
Stanbic Bank Plc (NSE: CFC) FY16 results on the other hand depicted EPS (-9.9%y/y) to KES 11.18, DPS down 14.6%y/y to KES 5.25. Net interest income advanced 17%y/y whilst NIM was lower in 4Q16 (5.5%) from 3Q16 (6.8%).
An increase in advances (+10%) and deposits (+12%) was observed in the year which was as a result of new loans despite the interest rate capping law environment. NPLs were on an increase from 4.1%-5% where NIR had a flat growth in the year with majority of the revenue coming from trading income (+9.7%y/y) against a decrease in commission income (-2.8%y/y).
The results were better-than expected and the stock is fairly attractive to investors, currently trading at a P/B of 0.8x.
East African Portland Cement
East African Portland Cement’s posted weak results despite net losses for 1H16 reducing by 53.0% y/y to KES 248.1Mn.
Ongoing cost management strategies yielded fruit as cost of sales declined by 18.4% y/y to KES 3.1Bn whereas the administrative expenses contracted by 9.0% y/y to KES 1.1Bn.
Loss before tax went down 28.4% y/y to KES 533.7M mainly driven by forex gains of KES 186.2M from forex losses of KES 187.6M in 1H16.
British American Tobacco
British American Tobacco Kenya Ltd (NSE: BAT) posted lower-than-expected FY16 earnings with depressed sales (10.8% y/y) affected by increased taxes (+24%), low revenues (-108% to KES 19.9Bn), Earnings per share (EPS) was down 14.9%.
Notable positives were; increased efficiency gains owed to lower operations costs (8.8%y/y), decreased finance costs (-44.8% to KES 295.0Mn due to lower foreign exchange losses and reduced interest expense), high cash flows from operations went up 31.4% which was pretty impressive.
The company is grappling with making sales amid a strict operating environment. A final dividend of KES39.50 has been proposed by the board of directors. The counter is trading at a P/E of 21.5X currently, which should is attractive to long term and dividend investors.
Kenya Power and Lighting Company
Kenya Power (NSE: KPLC) announced its results indicating an EPS of KES 2.15 (+11.4%y/y) which was mainly boosted by lower tax expense during the quarter. PBT fell slightly y/y by 1.7% and -11.1% h/h, to KES 5.6Bn. No interim dividend was announced for the half year (1H16 interim DPS – KES 0.20).