Britam Holdings, a diversified financial services company and Kenya Airways have issued profit warnings that earnings for the year will be lower than 2019 earnings.
According to Britam, the uncertain economic outlook from the Covid-19 pandemic has affected its core business units vital including real estate and the stock markets.
In a statement to shareholders, Britam through the Company secretary Nancy Kiruki said “Based on a preliminary assessment of the forecasted financial results of the Company for the period ending 31 December 2020, the earnings of the Company for the current financial year are expected to be substantially lower compared to the earnings reported for the same period in 2019.”
Similarly, in Kenya Airways’ business performance update the national carrier said demand for air travel remains low and it is projected to stay suppressed for at least the next twelve months.
“As a result, revenues for the airline have been low and will significantly impact earnings for the year,” said Michael Joseph, KQ Board Chair.
“As a second wave is currently affecting many countries which have imposed new restrictions, this is further impacting the airlines’ revenues as it cuts capacity deployed to various destinations,” he added.
Britam Holdings’ 2020 half-year net loss declined to Ksh 1.63 billion compared to a profit after tax of Ksh 1.67 billion in 2019 H1.
Joseph said the carrier has embarked on aggressive cost-cutting and cash conservation measures to minimise the impact on the airline.
The measures include moratoria with financiers, lenders, and lessors, renegotiations of contracts with suppliers and extended payment plans, reduction in distribution among others.
In June, KQ CEO Allan Kilavuka said from their estimates, since January they have lost in terms of revenue about $100 million and they expect the number to grow to between $400 and $500 million by the end of the year.
Currently, the Nairobi Stocks Exchange (NSE) has suspended the trading of Kenya Airways shares for six months to allow the conclusion of the airline’s operational and corporate restructuring and its nationalization.
President Kenyatta urged Parliament to prioritize the National Aviation Management Bill, which once enacted, will anchor the turnaround of the Pride of Africa – our National carrier, Kenya Airways.