Kenya Airways has issued a profit warning for the current fiscal year ending December 2022, attributing it to foreign exchange (Forex) losses resulting from the novation of guaranteed USD loans as part of the company’s ongoing financial restructuring program.
In a notice to the public, the company’s Board of Directors announced that earnings for the year are expected to be lower by at least 25% compared to the previous year.
“This means that the exchange rate difference, reported below the operating result and previously accumulated in the balance sheet reserves under hedge accounting treatment, will be released to the statement of profit or loss since the hedge instrument no longer exists. This is one-off expected losses.”
In 12 months to December 2021, the National carrier narrowed its net loss by 56.58 per cent to KSh15.8 billion compared to a net loss of KSh36.2 billion when travel restrictions were on.
In the period, total revenue jumped to Sh70.22 billion, lifted by alternative sources such as air charter services.
Kenya Airways’ Chairman, Mr. Michael Joseph, said in the notice, “The Board and Management is happy that the results of the restructuring plan are bearing fruit and continue to be focused and committed towards undertaking several key strategic initiatives to help the Company become profitable by 2024.”