Kenya Airways Falls for Fifth Day on Profit Drop: Nairobi Mover
Kenya Airways Ltd. (KNAL), sub-Saharan Africa’s third-biggest airline, fell for a fifth day and headed for its lowest level in more than seven weeks on uncertainty over the extent of its full-year profit decline.
The stock retreated 1.8 percent to 14 shillings by 11:52 a.m. in Nairobi, the capital. A close at that level would the weakest since April 18, according to data compiled by Bloomberg.
“The company is trading on a profit warning; so what the market is not sure is whether they are going to go into an outright loss or what level of profit fall will be reported,” Eric Musau, a research analyst at Nairobi-based Standard Investment Bank Ltd., said in a phone interview today.
Standard Investment Bank estimated profit will fall 44 percent, Musau said. KQ, as the airline is known, will announce earnings June 14. KQ issued a profit warning after the European debt crisis, rising fuel prices and political unrest in Egypt and Nigeria curbed revenue, the airline said in an e-mailed statement Jan. 27.
Profit in the full year through March 2011 surged 74 percent as the carrier added routes and boosted its fleet. Net income increased to 3.54 billion shillings ($41.7 million) from 2.04 billion shillings a year earlier.
The airline, based in Nairobi, said June 8 it raised 14.5 billion shillings through a stock sale to existing shareholders after achieving the minimum subscription rate. It received applications for 1.03 billion shares, or 70 percent of the total for sale, according to a statement published in the Standard newspaper today. The company had sought to raise 20.7 billion shillings to fund an expansion plan across Africa.
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