Kenya Airways profit falls on election crisis

Kenya Airways said on Friday its 2007/08 annual profit after tax fell to 3.9 billion Kenya shillings from 4,1-billion due mainly to the impact of the East African nation’s post-election crisis.

”The events post-election had a negative impact on our revenue, especially between January to March,” Titus Naikuni, the chief executive officer, told an investor briefing.

Violence after the disputed December re-election of President Mwai Kibaki killed 1 300 people, displaced 300 000 others, and hurt key economic sectors like tourism.

The airline’s stock fell to a low of 45,50 shillings by the end of February from 63,50 shillings on the last day of trade before the December 27 election.

A power-sharing deal between Kibaki and his rivals in late February has restored calm to East Africa’s largest economy.

The stock was trading at 50 shillings on Friday after the results’ announcement, up from 44,75 shillings on Thursday’s close.

Earnings per share fell to 11,93 shillings from 12,93 shillings while the board proposed an unchanged dividend of 1,75 shillings per share.

Naikuni said other factors impacting profits included the loss of a Boeing 737-800 which crashed in Cameroon last year, higher fuel prices and a stronger Kenya shilling.

One of Africa’s few profitable carriers, the airline expects delivery of three new 737-800 planes from Boeing this year as well as a new Embraer E170 jet in September.

But the delivery of nine Boeing 787 ”Dreamliners” originally due for delivery in 2010 to 2012 has been delayed by about two years, Naikuni said.

However, he predicted quick recovery for the Nairobi bourse blue-chip, which is one of the continent’s leading carriers.

”In 2008 we are concentrating on people development, and improving internal systems,” Naikuni said. He said the firm was training its own pilots and had hired a team from Lufthansa to assist in getting internal systems up to date.

The airline currently flies to 30 destinations mostly in Africa, the Far East and Europe.

In April, it announced it would launch new routes in Africa and increase its frequencies to others.

The carrier is 26 percent held by Air France-KLM, and is listed on three East African bourses. – Reuters

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