Kenya Airways loss for the year ended March 2016 grew by Ksh500 million to a new record of Ksh26.2 billion, despite an increase in revenues during the year.
The financial performance is worse off compared to Ksh25.7 billion net loss the previous year.
KQ suffered from a Ksh9.7 billion foreign exchange loss and an acceleration of other costs including interest expenses, according to management.
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Its revenue increased by Ksh6 billion to Ksh116.1 billion from Sh110.1 billion in the same period, trailing the increase in costs. The loss also saw the national carrier set a new record in wiping out shareholders’ equity, with the company’s net worth now at a negative Ksh35.6 billion from the previous negative Sh5.9 billion.
The loss comes after company recently received Ksh10 billion soft loan from the National Treasury to implement its turnaround strategy. The government borrowed the cash from China’s Exim Bank on behalf of KQ whose fortunes have dwindled in the last five years hurting its ability to book debt on its own.
Retrenchment costs are expected to be key in the management agenda following the delay of planned job cuts due to lack of funds. The loss-making company has announced plans to lay off 600 workers and recently sent home 80 employees.
I still can’t understand how the National carrier is making loses. Someone explain to me