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Kenya Airways Slides to Second Full-Year Loss in Four Years

Kenya Airways Ltd., sub-Saharan Africa’s third-largest airline, reported its second loss in four years as it failed to boost passenger numbers and revenue was eroded by a stronger shilling.

The carrier had a full-year loss of 7.86 billion shillings ($92 million) in the 12 months through March, compared with a profit of 1.66 billion shillings a year earlier, Chief Financial Officer Alex Mbugua said in an investor briefing today in the capital, Nairobi. Sales declined 8 percent to 98.8 billion shillings. The company last reported a loss in the fiscal year ended March 2009.

“We are quite bullish in terms of earnings going forward” because of falling fuel costs and rising customer volumes, Mbugua said. Passenger numbers during the year through March rose 0.6 percent to 3.67 million from a year earlier, while costs increased 20.7 percent.

Kenya Airways shares fell 6.5 percent to 10 shillings by 1:30 p.m. in Nairobi, the lowest level since April 2004. The company is 27 percent owned by Air France-KLM, Europe’s biggest airline.

Shilling Strengthened

“The main challenge was the fact that passengers remained flat and the shilling strengthened,” Faith Atiti, an analyst at Nairobi-based NIC Securities Ltd., said in an interview.

KQ, as the airline is known, said revenue had been reduced by 4 billion shillings after the Kenyan currency traded at an average rate of 85.02 per dollar, compared to 88.58 the previous year. The shilling has gained 0.7 percent against the dollar this year, making it the fourth best performer of 24 African currencies tracked by Bloomberg.

Kenya Airways shares plunged 42 percent in 2012, the worst performer on the Nairobi Securities Exchange. The stock has retreated 12 percent this year, while the bourse in East Africa’s biggest economy rose 30 percent.

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