Kenya Airways Ltd. (KNAL), sub-Saharan Africa’s third-largest airline, dropped the most in more than six weeks after reporting a first-half loss and saying full-year earnings would be reduced by at least 25 percent.
The stock fell 3.6 percent to 12 shillings by the close in Nairobi, the biggest decline since Sept. 21. About 437,000 shares, 107 percent of the three-month daily average, were traded.
In the six months through September, Kenya Airways made a loss of 4.79 billion shillings ($56 million) compared with a profit of 2.03 billion shillings a year earlier, the company said today. Revenue dropped 9.3 percent to 49.8 billion shillings. The carrier cited lower passenger traffic on some routes, increased costs associated with firing workers and a stronger shilling as all hurting earnings.
“We were expecting a loss but the results came in a lot weaker than our estimates,” Nairobi-based Standard Investment Bank said today in an e-mailed note to clients. “While the airline expects to recover in second half, it does not expect this to fully offset the first-half loss.”
A program to cut 12 percent of its workforce through early retirement and dismissal will cost 800 million shillings this year, Chief Executive Officer Titus Naikuni said Sept. 6.
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