Shareholders to wait longer even as KQ records 124% profit
According to Kilavuka, the profits made in the last financial year shall be reinvested as they focus on targeting strategic investors for a long-term sustainability
Kenya Airways has announced a Sh5.4 billion profit before tax for the financial year that closed on December 31 last year.
This is a historic turnaround by the national carrier in 11-year dry spell.
The profit reflects a 124 per cent profit increase from the Ksh 22.6 billion loss reported in the same period in the previous financial year.
KQ turnover rose by six per cent to Ksh to Sh188.5 million from Ksh 178.5 in 2023 which the airline said was driven by an increase in passengers.
Cargo volumes in the period under review also grew by 25 per cent to hit a historic high of 70.8 million tonnes.
For over a decade, KQ had never posted a full financial year result.
According KQ chairman Michael Joseph, the growth of the airline is due to the effective recovery strategy under the Kifaru project which he says has enhanced operation performance in different initiatives and delivery of exceptional customer service.
“In 2024, Kenya Airways reaffirmed progress in its turnaround strategy, Project Kifaru, resulting in the highest number of passengers that the airline has ever uplifted, the highest turnover and highest profit attained in the history of the airline,” Joseph stated.
KQ Chief Executive Officer Allan Kilavuka states that they are dedicated in ensuring a restructuring to reduce financial leverage and enhance liquidity as they target investors.
“Despite the ongoing global challenges faced by the aviation industry, such as shortages of aircraft, engines, and spare parts, our turnaround strategy is yielding positive results. We are dedicated to completing our capital restructuring plan to reduce financial leverage, enhance liquidity, and remain an attractive investment for strategic investors,’’ the KQ boss stated.
Even though the airline has recorded a profit, shareholders will wait longer to receive a dividend payout as the airline’s equity position is still negative.
According to the Kilavuka, the profits made in the last financial year shall be reinvested as they focus on targeting strategic investors for a long-term sustainability.
Kilavuka said that KQ is committed to optimizing its network, investing in fleet expansion, modernizing cabin interiors, and diversifying business segments to ensure sustainable growth while adapting to the evolving dynamics of the aviation industry.
The return to profitability is likely to boost the airline’s share, which returned to the Nairobi Securities Exchange (NSE) early this year, prompting a bullish response from investors that saw it almost double in price to Ksh 6 from Ksh 3.83.
The shares were initially suspended from trading in July 2020 after the government proposed a new law to nationalize the airline and rescue it from mounting debts amid the COVID-19-induced slump in global air travel.
The government shelved the nationalization plan after KQ showed signs of recovery.
Early this month, the National Treasury said it would offer banks that own a stake in Kenya Airways (KQ) a compensation of up to Ksh 6. 425 billion, should the lenders sell their shares below the principal loan they extended to the troubled airline.
