Kenya Airways Plc (KQ) on Tuesday posted a remarkable turnaround in its financial performance for the Financial Year ending December 31, 2024. The airline posted a profit after tax of KES 5.4 billion, marking a 124% increase compared to the previous year when it reported a loss of KES 22.6 billion. This represents an improvement of Ksh 28 billion, showcasing the effectiveness of its recovery strategy, Project Kifaru.
KQ’s Financial Performance
- Revenues: Kenya Airways recorded revenues of KES 188.5 billion, representing a 6% increase from FY2023. This growth was driven by robust passenger numbers and a significant rise in cargo volumes.
- Operating Costs: Total operating costs increased moderately by 2% to KES 171.9 billion, reflecting effective cost management amidst growth in operations.
- Operating Profit: Operating profit surged by 58% to KES 16.6 billion, showcasing improved efficiency and stronger margins.
- Net Finance Costs: The airline achieved a substantial reduction in finance costs, which declined by 67% to KES 11.1 billion. This was a key factor in boosting profitability.
- Profit Before Tax: KQ reported a profit before tax of KES 5.5 billion, a dramatic turnaround from the loss of KES 22.8 billion in FY2023.
- Net Profit After Tax: The airline closed the year with a net profit of KES 5.4 billion, compared to a loss of KES 22.7 billion the previous year—a significant improvement of KES 28.1 billion.
Also Read: Kenya Airways (KQ) Resumes Trading on the Nairobi Securities Exchange
Kenya Airways’ Strategic Initiatives
Kenya Airways’ recovery strategy, Project Kifaru, has been instrumental in achieving these results. The strategy focuses on:
1. Customer Focus: Enhancing customer experience through improved service delivery.
2. Operational Excellence: Streamlining operations to improve efficiency and reduce costs.
3. Financial Discipline: Implementing measures to strengthen financial health and reduce leverage.
4. Innovation: Leveraging technology to improve service delivery and operational efficiency.
5. Sustainability: Committing to environmentally friendly practices and long-term growth.
Operational Performance
- Passenger Numbers: KQ carried 5.23 million passengers, marking a 4% year-on-year increase as travel demand rebounded.
- Cargo Volume: Cargo operations saw impressive growth, with volumes rising by 25% to 70,776 tonnes, driven by high demand for air freight.
- Operating Margin: Improved to 8.8% from 5.9%, reflecting enhanced efficiency.
- Net Margin: Rebounded to a positive 2.9% from a negative 12.7% in FY2023
Michael Joseph, Chairman of Kenya Airways Plc, emphasized the significance of these results, stating that they set records for the highest number of passengers and turnover in the airline’s history. He highlighted the airline’s operational viability and resilience.
Allan Kilavuka, Group Managing Director and CEO, noted that the turnaround strategy is yielding positive results despite global challenges in the aviation industry. He reiterated the airline’s commitment to attracting strategic investors to ensure long-term sustainability.
Kenya Airways Challenges and Outlook
Despite the impressive performance, Kenya Airways continues to face challenges such as shortages of aircraft, engines, and spare parts. However, the airline remains focused on completing its capital restructuring plan to reduce financial leverage and enhance liquidity. This will position Kenya Airways as an attractive investment for strategic investors and ensure its long-term sustainability.
The airline’s focus on innovation, sustainability, and customer satisfaction positions it as a key player in the aviation sector, with promising prospects for future growth.
