Kenya Airways’ associate, Precision Air, posts net loss of KES 1.6bn in FY2012/13

Precision Air has posted a net loss of KES 1.6bn for the full year ended March 2013 due to increased operating expenses. The airline’s total operating expenses rose 44.2% y/y to KES 2.9bn on the back of increased staff related costs, impairments on receivables and marketing expenses leading to an operating loss of KES 977.7m. The gross profit meanwhile was down 27.3% y/y to KES 1.8bn as a result of increased fuel and maintenance costs. Revenue however rose 11.2% y/y to KES 9.8bn driven by increased passenger numbers (+8.5% y/y to 895,150 passengers). The airline will scale back on routes and cancel expensive aircraft leases to return to profitability. Last month, Precision Air sought a USD 32.0m bailout package from the Tanzania government to mitigate the effects of high borrowing costs (finance costs were up 6.8% y/y to KES 442.7m in FY13) related to the acquisition of seven planes from Avions de transport regional (ATR) for a total cost of USD 136.0m in 2007. The airline’s IPO in 2011 was also undersubscribed, limiting the cashflow available to service the debt. Kenya Airways’ owns 41.0% of Precision Air and recorded a loss of KES 230.0m in FY13 relating to this stake. (Source; Business Daily, Kestrel Research)

We are watching

Good for you! We will wait until 31st Oct 2013. In the meantime, I am staying out since 14/- is a mirage. Again, IMHO.

#AGM > NAIROBI, Kenya, Sep 26 – Kenya Airways has assured its shareholders that it will turn the losses experienced in the period ended March 2013 into profit in the next financial year.

Kenya Airways Managing Director Titus Naikuni says the airline has set targets to achieve cost saving in all areas of the business by improving work practices. > http://www.capitalfm.co.ke/busi...return-to-profitability/