Kenya Airways, the national carrier of Kenya, has issued a profit warning to its shareholders regarding its financial results for the current fiscal year. In a notice to the public, the Board of Directors of the company announced that earnings for the year ending December 31st, 2022 are expected to be lower by at least 25% compared to the previous year.
The airline attributes this decline in profits to foreign exchange (Forex) losses, which were a result of the novation of guaranteed USD loans as part of the company’s ongoing financial restructuring program. The exchange rate differences, previously reported below the operating results and accumulated in the balance sheet reserves under hedge accounting treatment, will now be released to the statement of profit or loss, resulting in a one-off expected loss.
Despite this setback, the company’s management remains optimistic about the future of the company become profitable by 2024.
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.”
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