Kenya Airways half-year loss more than doubles to $149m on forex losses
Tuesday August 29 2023
Kenya Airways plane pictured at Kenya Airways Headquarters in Nairobi, Kenya on June 13, 2023. PHOTO | BONFACE BOGITA | NMG
Kenya Airways' (KQ) net loss widened to Ksh21.7 billion ($149.45 million) in the half-year ended June 2023, representing more than double the Ksh9.9 billion ($68.18 million) loss it made in 2022. Despite this, the national carrier reported its first operating profit in six years.
The loss is largely attributed to foreign exchange costs resulting from a steep depreciation of the Kenyan shilling. The shilling depreciated by about 15 per cent against the US dollar between January and June.
During the six months to June, the airline’s revenues increased by 56 per cent to Ksh75 billion ($516.53 million), largely because of a growth in passenger revenues by Ksh29.9 billion ($206 million) as passenger numbers grew from 1.6 million in the first half of 2022 to 2.3 million.
However, the impact of the high revenues was wiped out by equally higher costs that climbed by a higher rate of 67 per cent to Ksh96.8 billion ($666.67 million), mainly due to Ksh22 billion ($151.52 million) in finance costs and Ksh7.4 billion ($51 million) fuel costs.
Read: Kenya settles $86m debt by KQ
The airline recorded its first profit in six years at an operational level as its revenues surpassed operational costs, making Ksh998 million ($6.9 million) in operational profits.
“Operating results show the company is viable. For the first time in six years we have made an operating profit, which is clearly a testament of the hard work we put in to turn around this airline,” said KQ boss Allan Kilavuka.
During an investor briefing Tuesday, the MD attributed the huge loss to high foreign exchange costs the company continues to bear, mainly due to huge dollar-denominated debts it has.