KQ flight at Moi Airport Mombasa National Carrier, Kenya Airways has issued profit warning for the current financial year, meaning its loss will be at least 25 per cent more compared to 2018.
Last year, KQ, as it is known internationally reported a net loss of Sh5.9 billion, up from Sh5.1 billion in 2017.
In a statement to investor, KQ chairman Michael Joseph said although th airline has realised improved revenue, profitability was constrained by the increased competition in the airline area of operation, which has increased pressure on pricing in order to remain competitive.
”The board bring to the attention of the public that the earnings for the current financial year are expected to be lower by at least 25 per cent than earnings reported in 2018. This is based on forecasted financial results for the year ending December 31,” KQ said.
The airline which last reported a profit of Sh4.1 billion in the year ended March 2011 has been issuing warnings since 2012, despite receiving a shot in the arm from the government.
In 2017, KQ’s top shareholder, the Kenyan government, and 11 local lenders converted the bulk of their debts into shares, helping to relieve cash flow pressure.
The restructuring saw lenders acquire 38.1 per cent stake in the airline after converting their Sh23 billion debt into equity.
This was after the airline reported a loss of Sh26 billion, highest ever witnessed in Kenya’s corporate scene, pushing negative equity of Sh45 billion in its subsequent financial year.
The profit warning is the last nail to the Sabastian Mikoz’s tenure at the airline, a Polish manager who will be exiting end of this month.