Kenya Airways (KQ) Investors at the Nairobi Securities Exchange (NSE) are clutching their wallets as the market awaits release of the airline’s unaudited half-year financial results scheduled to be announced on 25th August 2025. While the business appears to be making a dramatic turnaround in fortunes as shown by its financials, investors are still wary of the airline’s huge debt load as well as the diluted local shareholding that has taken place over the last few years.
Available data shows that KQ shares have gained considerably since resumption of trading at the NSE after a near 5-year freeze but investors still remain cautious. The counter has gained an estimated 24% since it resumed trading at the NSE.
“There are still quite a number of uncertainties. While the business looks like it is turning around such as load factor exceeding 70% and the airline becoming profitable, there is still significant debt in the business. The financing element still remains an Achiels heel for them, risks and sustainability elements of the business. With the ongoing restructuring process, banks still have substantial holdings, meaning that ownership of existing shareholders has been diluted considerably over the years,” said a lead researcher at one of Kenya’s big investment banks.
“There is also the existing debt situation that is still in place, presenting significant uncertainties in KQ. Until these fundamentals are sorted, the turnaround cannot be described as solid,” he told Business Today in an interview.
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KQ is seen to be operationally turning the corner, including the operating margins and load factors that is driving the revenues. The bigger uncertainties remain financing costs but the underlying business is seen by the market as fairly solid.
Stockbrokers maintain that the level of liquidity of the counter, as indicated by the number of shares trading, is yet not indicative of the underlying risks around the financing component of KQ business.
Investment bankers rank KQ as the 14th most traded stock on the Nairobi Securities Exchange(NSE) over the past three months with a traded volume of 14.8 million shares in 3,140 deals-valued at KSh 72.5 million over the May 14th-August 12th 2025 with an average of 235,295 traded shares per session. A volume of 1.46 million was achieved on May 20th and a low of 13,200 on May 20th 2025.
The average current price of KQ is KSh 4.76. The counter closed its trading day on Friday 15th August at KSh 4.70, compared to KSh 4.78 on 12th August 2025 and a closing price of KSh 4.88 on 11th August 2025.
KQ begun the year with a share price of KSh 3.83 and has since gained 24.8% on that price valuation, ranking it 25th on the NSE in terms of year to date performance.
Analysts warn investors of KQ’s recent poor performance, having lost 10% of its value in the past four weeks. KQ is currently the 14th most valuable stock on the NSE with a market capitalization of KSh 27.2 billion which makes up 1.07% of the NSE Equity market.
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The airline’s financials show that it made a net profit of KSh 5.4 billion for the financial year ended 31st December 2024, a huge improvement of KSh 28 billion from a net loss of KSh 22.6 billion reported in 2023. This strong performance is what is anchoring investor interest even as the airline’s fundamentals remain weak with its assets far outweighed by liabilities.
Trouble for the carrier began in 2017 when it soaked up a debt of US$ 800million, cash that was used to purchase expensive aircrafts that ended up plying non-profitable routes. Under the former CEO Titus Naikuni, KQ embarked on a huge KSh20.7 billion ($250 million) plan, financed through a rights issue, aimed at raising cash to enable the airline to expand its passenger, cargo aircraft fleet, expand its network and go into new markets.
The COVID-19 pandemic, a weakening Kenya Shilling and hash global business environment, conspired with this huge debt load, to drive the airline into further turbulence. Naikuni resigned leaving KQ with torn pockets. KQ has since then been on a painful and long capital restructuring plan that is geared at reducing the carrier’s financial debt load and boost its low cash levels.
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