KQ CFO Hellen Mathuka notes headwinds affecting H1 results

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Kenya Airways (KQ) has recorded a 120 percent improvement in operating profit, from a loss of Kshs 5 billion in 2022 to Kshs 998 million in 2023, with CFO Hellen Mathuka noting the two major headwinds that impacted business in the first half of the year.

Kenya Airways (KQ) has recorded a 120 percent improvement in operating profit, from a loss of Kshs 5 billion in 2022 to Kshs 998 million in 2023.

CFO Hellen Mathuka said, “The Group generated record revenues of KES 75 billion recording a 56 percent increase compared to the same period last year. This increase is mainly attributed to a significant growth in passenger revenue which grew by 80 percent. We uplifted a total of 2.3 million passengers during the period, a 43 percent improvement compared to the prior year’s 1.6 million passengers."

“Cargo decreased by 11 percent, due to capacity constraints and tonnage decreased by 22 percent compared to the same period last year,” she added.

Hellen further noted that there were two major headwinds impacting business in the first half of 2023.

“The first is the significant devaluation of the Kenyan shilling against other currencies. The devaluation of the Kenyan shilling is significant as it impacts the financials as the majority of transactions are in major foreign currencies. Overhead increased by 22 percent. The second issue is the legacy debt,” she explained.

“We see strong customer demand, and focus on innovation to support transformation. We are confident that with the support of employees, customers, the government, industry partners and ongoing initiatives we are on course to turnaround by 2024,” she added.

The national carrier’s legacy debt, which is estimated to be around $1 billion, is the result of an expansion drive taken over five years ago.

Allan Kilavuka, Kenya Airways Group MD and CEO, said, "We are working to resolve the issue of the legacy debt in collaboration with our stakeholders and the Kenyan government.”

"Our focus looking ahead is on recapitalising the business to place Kenya Airways on a stronger footing and provide a stable base for long-term growth. We will continue focusing on our network expansion and fleet optimization to increase passenger and cargo capacities. Further, we see a promising trend in forward bookings for the year's second half. It all starts with a robust summer peak, particularly in July and August, where our load factors exceed last year's," he added.

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