Kenya Airways reported a net loss of Sh38.36bn, almost more than double than last year in FY ending December 2022 citing rise in financing costs after the government took over servicing one of the dollar-denominated loans. The airline had reported a loss of Sh15.86 bn in 2021.
The airline’s board is optimistic and claims to break even this year and even end-up in profit by 2024. Kenya Airways posted profit for the last time in 2012 with net earnings of Sh1.66bn.
An optimistic Allan Kilavaku, CEO, Kenya Airways said: “We are emerging. I am very excited with what we are doing. We have a journey to walk to 2024, but green shoots of change have started to show.”
Kenya Airways had seen a rise in total income from Sh70.22 billion to Sh116.87 billion but suffered a net loss mainly because of Sh18 billion finance cost that was passed through the income statement after the State took over the servicing of one of the dollar-denominated loans.
Rising prices of the fuel further increased the costs from Sh86.4 billion to Sh155 billion while other operating costs increased by Sh12.4 bn as capacity increased.
Hellen Mathuka, chief financial officer, Kenya Airways said: “Net financing cost increased by Sh23 billion because of a one-off transaction that was taken during the year pertaining to the takeover of a US dollar-denominated loan by Kenyan government which converted the loan to Kenyan shillings. The conversion required as a company to recycle the foreign exchange losses through the profit and loss accounting, having an impact of Sh18 billion.”
The airline’s posted a rise of 66% in the total revenue closing at Sh117 bn with increased passenger volume. The airline’s cargo business uplift increased by 3.5% to 65,955 tonnes.
However, the airline saw a 59% rise in total operating costs for the year to Sh122.4 billion, with direct operating costs increasing by 94% on increased operations and huge global fuel price increases throughout the year.
“Overall, the airline recorded an improvement if you strip off the Sh18 billion that was passed through the income statement. The Sh18 billon is not a financial loss, but a reclassification, and that has a big impact on the results,” Kilavak added.