Kenya Airways Plc has joined the growing list of companies issuing profit warning announcements. KQ which has unsuccessfully tried various restructuring strategies will see this year’s loss widen by over 25 per cent.
the earnings for the current financial year are expected to be lower by at least 25% than the earnings reported for the same period in 2018.This announcement is based on the forecasted financial results of the Group for the year ending 31st December 2019.
In a statement, the board indicates that despite the airline realizing an improved revenue growth in the year, profitability was constrained by the increased competition in the airline area of operations. This, in turn, saw increased pressure on pricing in order to remain competitive. In addition, the adoption of new IFRS 16 rules in 2019, has required significant adjustments to both the profit and loss statements and balance sheets for the current financial year.
KQ reported a half-year loss which more than doubled to Kes 8.56 Billion, sinking shareholders into a deeper negative equity position of Kes 16.18 billion which of which was attributed to the increased operating costs in the wake of its expansion into new routes and the return of two Boeing 787 planes that had been sub-leased to Oman Air.
Kenya Airways, two days ago appointed Allan Kilavuka,as Chief Executive in acting capacity, taking over from Sebastian Mikosz who will be leaving the firm at the end of the month.
