Cash-strapped National Carrier Kenya Airways(KQ) and power utility firm Kenya Power are set to receive cash from the National Treasury in the 2022/23 budget to assist Kenya’s economy to bounce back from COVID-19 effects.
The two state-owned enterprises did not obtain any allocation in the current budget.
National Treasury has been blamed in the current Budget Review and Outlook Paper (BROP), for not designing a recovery roadmap for Kenya Power and KQ.
KQ got a cash injection of KSh 10 billion in 2020/21 financial year
National Treasury pumped KSh 10 Billion into KQ in the financial year 2020/21, ignoring earlier International Monetary Fund (IMF) recommendations which favoured long-term reforms to solve cash flow challenges facing state-controlled firms and parastatals instead of bailouts.
The national carrier has made clear its plea for additional cash from anchor shareholder, the government, to help it out of its precarious financial position.
KQ cut its losses in H1 2021 but was still in loss territory
Kenya Airways(KQ) cut down its Net Losses to KSh 11.5 Billion in H1, 2021 compared to a Net Loss of KSh 14.3 Billion over the same period in 2020.
KQ also recorded a reduction in Total Income to KSh 27.4 Billion in H1, 2021 from KSh 30.2 Billion during the period under review.
The national carrier’s balance sheet size shrunk to KSh 153.3 Million in H1, 2021 from KSh 171.5 Million in H1, 2020.
The Airline cut its operating losses from KSh 8.4 Billion at the end of H1, 2021, compared to KSh 8.4 Billion in H1, 2020.
Equally debt-laden Kenya Power has also sunk into a near dire financial position with operating costs rising faster than revenue, exacerbated by elevated financing costs and system losses.
The electricity distributor recorded a loss before tax of KSh 7,042 Million in the financial year ended June 30th 2020, a decline from the previous year’s profit before tax of KSh 334 Million.