Kenya Airways half-year loss more than doubles to Sh21.7 billion on forex losses
A photo taken on November 5, 2022, shows Kenya Airways planes at the JKIA parking bay.
What you need to know:
- The loss is largely attributed to foreign exchange costs resulting from a steep depreciation of the Kenyan Shilling.
- Despite the loss, the national carrier reported its first operating profit in six years.
Kenya Airways' (KQ) net loss widened to Sh21.7 billion in the half-year ended June 2023, representing more than double the Sh9.9bn 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 Kenya 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 Sh75 billion, largely because of a growth in passenger revenues by Sh29.9 billion 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 Sh96.8 billion, mainly due to Sh22 billion in finance costs and Sh7.4 billion fuel costs.
The airline recorded its first profit in six years at an operational level as its revenues surpassed operational costs, making Sh998 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.
