Kenya Airways FY2016 results impacted by foreign exchange, borrowing costs and fuel hedging losses

Kenya Airways stated (21-Jul-2016) a KES12.2 billion (USD120.2 million) improvement in its operating loss in FY2015/16 was underpinned by an increase in passenger numbers and load factor; reduced direct operating costs, overheads and fuel; and an increase in fleet costs. The airline said its results were impacted by three significant items:

• The strengthening of the US dollar against the Kenyan shilling and other currencies, resulting in an increased foreign exchange loss of KES9.7 billion (USD95.5 million);
• An increase in the cost of borrowing, incurring an additional KES2.3 billion (USD22.6 million) in interest expense;
• The movement of oil prices, resulting in an additional KES5.09 billion (USD50.2 million) in fuel hedging losses.

The company noted that excluding one-off impacts related to asset sales, compensation for late delivery of aircraft, write-offs, impairments and provisions, it broke even at the operating loss level, an improvement of KES11.14 billion (USD109.7 million), and loss before tax improved by KES2.5 billion (USD24.7 million). [more - original PR]