Kenya Airways struggles on recovery path, net loss down to US$75 million in 2018
Nairobi, Kenya (PANA) – Kenya Airways (KQ's) path to balance sheet recovery has narrowed substantially from its peak full year loss of US$250 million in 2015 to US$75 in 2018, the airline announced on Tuesday in its full year financial results.
The reduced net loss to US$75 million has been recorded on the back of strong revenue growth boosted by higher passenger and cargo volumes, KQ Chairman Michael Joseph said.
Kenya Airways board of directors said the 2018 financial results could not be directly compared to the corresponding 2017 financial results after changes were made to the airline's accounting regulations.
The Airline previously reported its full year financial results, ending March, but under new accounting regulations, the full year would now be recorded as at 31 Dec. The airline recorded a total revenue of Ksh.114.8 billion (US$1.14 billion) in 2018, due to the growth of passenger numbers.
At least 4.84 million passengers flew the airline to 53 international destinations worldwide, among them 43 African destinations, the airline said.
Joseph said the airline would continue to focus on delivering the turnaround programme on which it embarked on in 2016. Revenue for the past 12 months hit US$1.14 billion in 2018 from US$800 million recorded for the nine-month period of Dec. 2017.
This was mainly due to earnings from passenger revenue, which hit US$88.7 million in 2018 compared to 63.9 million dollars in 2017.
Joseph said the airline implemented cost-cutting measures which enabled it to swim above extreme market pressure, high fuel costs, personnel and cost of fleet acquisition, to stay on course to profitability.
In 2015, the airline’s finances deteriorated with cost of operations hitting 412 million dollars in 2014.
It managed to cut the operating loss to Ksh.11.9 billion, about 119 million dollars, after renegotiating its loan repayment schedules with local banks as part of its financial restructuring process.
The airline then formed a special purpose vehicle to support management of company assets and acquisition of aircraft.
At the time, the airline owed 1.12 billion dollars in debts to banks and other creditors, pushing its annual cost of finance to 33 million dollars.
Joseph said due to changes in accounting rules, the current financial statement was not directly comparable with the 2017 results because it represents 12 months against the nine months for 2017.
The Airline’s board stated that borrowing as at 31 Dec.2017 for the purchase of aircraft were erroneously classified as non-current liabilities while the airline had not met the terms of the contracts and did therefore not have the unconditional right to delay payment for the next 12 months.
-0- PANA AO/VAO 30April2019
