BY AGENCIES
KENYA Airways, one of Africa’s leading carriers, has issued a profit warning, blaming the euro zone debt crisis, political unrest in Egypt and escalating fuel prices.
The warning is likely to surprise investors after the airline, which is 26 per cent owned by AirFrance-KLM, posted a 38 per cent jump in half-year pre-tax profit, aided by growth on its African and Asian routes.
"It is predicted that earnings for the year (ending March 2012) will be at least 25 per cent less than the level of earnings in the previous year," Kenya Airways said in a statement after the bourse closed on Friday.
Analysts predicted Kenya Airways shares were likely to sell off today morning. The stock finished on Friday unchanged at Sh20.25 a share.
They added, however, that the downside could be limited because the shares are attractively valued ahead of a cash call to fund the acquisition of new planes.
Kenya Airways shares will trade with a price to earnings ratio of just over 3 following the profit warning, having lost more than half of their value since the firm announced its fund-raising plans last year.
The airline’s strategy hinges on connecting African travellers with the rest of the world, while carrying travellers from other parts of the world to Africa, through its Nairobi hub.
"The airline’s strategy to grow its network in Asia and Africa as well as renewal of its fleet will continue to improve efficiencies and outlook for the future," it said in the statement
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