Kenya Airways reported a loss of KSh38.2 billion for the fiscal year ending December 2022, double the KSh15.8 billion previously.
In January, the Kenyan national airline’s Board of Directors announced that earnings for the year would be lower by at least 25% due to foreign exchange (Forex) losses.
“The tight forex demand had a significant impact on Kenya Airways’ financial transactions which are mainly carried out in the major foreign currencies, specifically the devaluation of the Kenya Shilling,” KQ CEO Allan Kilavuka said Monday.
“If you remove the impact of those losses and the abnormal fuel cost increase of 160 per cent, we would have made an operating profit.”
During the year, the airline’s total revenue increased by 66 per cent to Ksh117 billion as passenger numbers rose by 68 per cent to 3.7 million and cargo business uplift increased by 3.5 per cent to 65,955 tonnes.
The Group’s revenue stood at KES117 billion, a 66% increase from the previous year. This is 5% below the pre-pandemic reported revenue, indicative of the Groups projected recovery by 2024. #KQ2022FYResults #PathToRecovery pic.twitter.com/Sd5uaw3RJJ
— Kenya Airways (@KenyaAirways) March 27, 2023
KQ’s costs surged from Ksh86.4 billion to Ksh155 billion, mainly driven by rising fuel prices. Other direct operating expenses shot up due to increased capacity.
“Net financing cost increased by Sh23 billion because of a one-off transaction that was taken during the year pertaining to the takeover of a US dollar-denominated loan by the Kenyan government which converted the loan to Kenyan shillings,” said Hellen Mathuka, chief financial officer at KQ.
“The conversation required as a company to recycle the foreign exchange losses through the profit and loss accounting, having an impact of Ksh18 billion.”
The KQ board says the airline will break even this year and reach profitability by 2024.
“We are emerging. I am very excited with what we are doing. We have a journey to walk to 2024, but green shoots of change have started to show,” said Kilavuka.