KQ announces 20% improvement in half year report

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Kenya Airways (KQ) Friday announced a Sh3.8billion dip in net loss in the first half financial report ending September.

This was a 20.5 per cent improvement from Sh4.78billion posted in a similar period last year.

The airline which is majority-owned by the Kenyan government says its operating profit also improved to register Sh1.443billion during the six month-period under review from Sh0.9billion last year. Overall operating costs narrowed to Sh53.075 billion from Sh53.799 billion in 2016.

Cabin occupancy expanded by 5.4 per cent as passenger numbers increased by 3.3 per cent to 2.31 million while fleet costs dipped by 21.9 per cent. Overhead costs reduced by 8.9 per cent during the period under review.

KQ Board Chairman Michael Joseph told shareholders that despite improved performance, the airline continues to operate in a very competitive environment and has to contend with volatile fuel prices.

“In order to drive better performance, the Airline will focus on continuous cost reduction, introduction of new revenue streams and network optimization,” said Michael Joseph as he updated KQ’s performance to shareholders.

Kenya Airways has appointed former KCB chief executive Martin Oduor-Otieno and former banker Carol Musyoka as non-executive directors to represent 10 Kenyan banks that are now the second largest shareholder in the airline. Investment Secretary Esther Koimett also became director increasing Treasury’s board representation to three following its increased stake.

On Wednesday, the Nairobi Securities Exchange (NSE) suspended trading of KQ’s shares for two weeks to facilitate the company’s share split pursuant to a decision reached earlier this week, in which the Government, represented by the National Treasury and 10 local banks on Monday agreed to convert more than Sh44 billion of the airline’s debt into equity, in a transaction that ended this week and has seen a rise in state’s ownership at the troubled air company.

“Notice is hereby given on the suspension in trading of Kenya Airways PLC effective November 15 up to and including November 28. The suspension is to facilitate the share split and simultaneous consolidation of the company’s shares which forms part of the Kenya Airways PLC capital transaction,” NSE said in a notice to shareholders.

Also on the cards is an open offer of new shares intended at a later date that will enable KQ shareholders re-invest in the airline.

Staff will also be able to own part of the organization through an Employee Share Ownership Plan (ESOP).

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