Kenya Airways reports a shock USD92 million loss for FY2013, but grows its Asian markets

Kenya Airways has shocked the market with a significantly worse than expected KES7.9 billion (USD92 million) loss after tax for the year ending 31-Mar-2013 (FY2013). The loss follows a FY2012 net profit of KES1.6 billion (USD18 million) and was driven by the effects of the European economic downturn and geopolitical uncertainty surrounding a number of general elections in Africa, which caused a significant drop in demand.

Kenya Airways is Africa's fourth largest carrier and among the few consistently profitable airlines on the continent, but it issued a profit warning in Nov-2012 for FY2013, flagging its half year loss would be followed by modest full year profits which would be less than 25% of the FY2012 profit.

While the second half of the financial year was stronger, as expected, it became clear that the revised target would not be achieved when Kenya Airways reported flat demand numbers for 4QFY2013 and the KES5.53billion (USD65 million) losses in the first half would not be recovered.