Kennedy Wilson European Real Estate Fund, KWERF, was finally bought today at $12.36/sh. I had tried to get it cheaper before the relatively good results for last year came out today without success. I guessed that its operating income in pounds would jump from conversion from euros from its real estate in Spain, Italy, and Ireland into sterling. I was right. Net operating income in calendar 2016 rose 23% to £160.3 mn. However net profit did not, falling by nearly ¾ to £66 mn under IFRS terms, although adjusted earnings were £74.1 mn, up 14% from 2015.

Dividend/sh was GBX 48 up 37% y/y including a final payout to come Mar. 10 of GBX 12 pence.

However the numbers also show that NAV for the REIT, which owns 233 properties (including some in Britain) fell 5.8 % in 2016 to £1.5359 bn (IFRS) or 4% to £1.5337 bn, adjusted.

That comes to IFRS GBX 1217.6/sh or adjusted GBX1215.9/sh, in either case a loss of about 9% in value because of the sterling devaluation after Brexit. Moreover debt incured rose 11.3% to £1.2348 bn and became a larger part of the value of the holdings, at nearly 43% vs prior year's 39.7%. However, the cost of debt is about 3% and 92% of what the REIT owes is fixed or hedged.

Other good news is that new commercial leases boosted rentals by over 11% last year and moreover beat the estimates made of the potential income by 3.1%. This was achieved by buying and selling properties. The sales of 89 properties yielded £413.1 mn, a 4.8% rise against the book value they were carried at and a return on cost of 31.8%. Going forward things may not be so good. The big new spend was on two developments in Dublin to add £8 mn plus in net operating income. It signed a new shopping mall lease for 25 years also in Dublin with Tesco, and will gain revenues as asset manager thereby.

KWERF is using its US parent smarts to continue to actively manage the REIT by disposals as well as buys and CEO Mary Ricks said “2017 will continue to see a balance between disposal proeeds and selective capital deployment.” This should deliver returns above book value.

The dividend in sterling was raised by 37% to GBX 48 pence/sh.

Mexichem (MXCHF) reported after markets closed Thursday on Q4 and 2016 full year with a lot of adjusting because of the disaster at its vinyl chloride monomer plant for clarification, because this was a one-off. So we are using the adjusted International Financial Reporting Standards (IFRS) numbers rather than the raw ones. Consolidated Q4 revenue came in up 9% at $1.3 bn in constant currency, and up 5% in current ones, in dollars, MXCHF's operating currency as a Mexican multinational. Without excluding the Fluor disaster, its cash flow (earnings before interest, taxes, depreciation, and amortization) rose 7% to $227 mn (also excluding a legal settlement in Q4 2015) and in constant currency rose 11%. Excluding its impact, the Q4 y/y EBITDA rise was 16%! The consolidated EBITDA margin was up about 194 basis points to 19.6%; the adjusted level excluding Fluor and other extraordinary events was up 38 basis points to 18%. Net income hit $65 mn, adjusted down to $58 mn. The year finished very strongly despite the attacks on Mexico from up north. While the company's financing costs fell sharply because it was upgraded by the raters, and because its Mexican peso debt was cheaper, it was hit by higher taxes in part because an arrangement in 2015 was no longer in place, and because it made forex hedging gains. The actual tax rate fell from 51% to 48%, which shows that Mexico needs a corporate tax reform even more than the US.

Given the much stronger dollar in its home market, MXCHF gained from its global exposure. Last year its sales to Europe hit 37% (vs 35% in 2015); those to North America fell to 36% from 38% the year before; and those to South America flat at 23%. (The rest is elsewhere). By country, its sales are mostly to the US (16%); Germany (13%); Britain (8%); and Brazil (6%)

The full year was a bit less marvelous, with sales down 5% to $5.35 bn or flat at %5.6 bn adjusted, because of restructuring and exits from some businesses during 2016 and because of currency changes. EBITDA at $926 mn was either up 2% (with the fluor figures) or down 2%. Net income rose 76% to $238 mn and adjusted income rose 94% to $262 mn again thanks to EBITDA and Ebitda margins which we have already reported on earlier.

Gray market-traded MXCHF is a maker of specialty chemicals with high margins operating globally recommended to me by Marilu Pichardo who runs Mexico Equity and Income Fund, MXE, as a way to reward patience. MXCHF is down 5.35% Friday as the market tries to figure out Trumpian policy on Mexico. Meanwhile MXE is only down 1.4%.

Cosan  (CZZ) of Brazil presented an even more complex results note, for Q4 and 2016, largely because so many of its subs are also listed. Its Q4 was a bummer, as sales fell 2.6% (in reais, its currency, not bucks) to Rs12.044 bn, consolidated. Operating income fell 19.3% (yikes) to Rs 1.578 bn. Before tax earnings came in down 51.7% at Rs 703.8 mn, and net profits were non-existent because it lost Rs38.1 mn vs a gain of Rs 357 mn in Q4 2015.

Happily the full year was better for the sugar refiner, ethanol producer, gas station operator, gas utility, logistics firm, and retailer. In a developing economy like Brazil, a firm like CZZ becomes a jack of all trades. Its full year sales were up 9.1% to Rs 51.899 bn while operating income was up 21.8% to Rs 7.632 bn. Before tax earnings were up 24.7% to Rs 4.367 bn while cashflow (EBITDA) was up 24.8% to Rs 7.476 bn. The bottom line was down by only 0.3% with net profits of Rs405.7 mn.

Its winners included combustibles but its losers included ethanol, up 10% in sales and down 27% respectively. In a poor country, green energy is not going to get sold (although under Brazilian law what you put in your car does contain compulsory ethanol). Comgaz, which distributes to households and industry, sold 14% more last year than in 2015, as the economy recovered somewhat. The retailing side also saw some growth, at 6% (pro forma; it was hived off from the gas stations last year.) The separately listed logistics side (which took over Rumo a couple of years ago) is mixed, with sales down because of loss of export business, but profits up despite lower volumes. It also saw a capital increase and already this year issued US$750 mn in global bonds. It also posted an exchange offer for its logistics company against new Cosan shares plus cash for an outfit called TPG VI Fundo de Investimento em Participaçðes with which it bought Rumo in 2010. I have no idea what this will do to the common stock. (There is another Brazilian also watering its shares discussed below.) CZZ fell 2.81% this morning before Wall St. opened and now is down 6.4%.

British insurance company Standard Life (SLFPY) reported adjusted IFRS pretax profits of £723 mn ($902 mn) up 9% y/y, and its will pay a final dividend for 2016 0f GBX 13.35 which will bring the total for the year to GBX 19.82, up 8% from last year but of course lower for Americans as it is in sterling. We only bought SLFPY after Brexit so this doesn't count. Obviously for an insurance company, sales are not important but its total revenue hit £1.74 bn, up 4%. It is not only an insurance company in Britain and exotic former colonies, but also a manager of funds, and its assets under administration (including for other funds it doesn't own) rose 16% last year to £357.1 bn. EPS was 29.5 pence up from 26.1 p in 2015. SLFPY stock here has fallen since the results came in from $18.95/sh to $18.66 bid, $18.85 ask.

Pan-Asia insurance co AIA (AAGIY) of Hong Kong reported net profits up 51% in 2016 to $4.16 bn while revenue rose 21% to $28.2 bn. New premium sales jumped by nearly a third to 5.12 bn. EPS however only rose 15% in the year to 33.25 US cents. It announced a full year dividend of 63.75 HK cents (US 8.22 cents) to shoae “our confidence in the future outlook for the Group.” AAGIY stock fell 1.4% after rising in Hong Kong. Nomura rates AIA neutral as it is near the top of the range hit since it was spun off during the global financial crisis. It is at $6.17 bid 6.33 ask now on Wall St. but insurance stocks are down across the board.

*A ninth year of losses was reported by Royal Bank of Scotland (RBS) and Q4 was in the red except at NatWest, a sub. We own its non-cumulative preferreds (and the Nat West C's) and actually prefer that it not make money because this will delay privatization and recall of our high-yielding shares.