Kenya Airways Plc · NSEKE:KQ
Kenya Airways — H1 2019 Earnings Presentation
21 slides from Kenya Airways's earnings presentation, August 2019
Slide 1: On The Right Flight Path
On The Right Flight Path HALF YEAR 2019 FINANCIAL RESULTS
Slide 2: The Agenda
The Agenda • Welcome • Aviation In The World and Africa • KQ Turnaround Strategy • 2019 Key Highlights • KQ Financial Results Half Year 2019 • Future Outlook
Slide 3: Aviation In The World and Africa
Aviation In The World and Africa
Slide 4: The Aviation Market Is Going Through Challenging Times
The Aviation Market Is Going Through Challenging Times No. of Airlines that globally ceased operations in 31 2018 and 2019 mainly as a result of financial distress India Germany Britain Iceland Poland Brazil
Slide 5: The African market is growing, however it is still far below global benchmarks
The African market is growing, however it is still far below global benchmarks 10.00% 8.60% 8.50% 7.50% To benefit from the 8.00% 5.80% growth in Africa, KQ 5.00% 6.00% must continue to fight 4.00% 1.10% for a share of this 1.10% 1.50% 2.00% 0.80% market by pursuing a 0.00% growth strategy. 2015 201
Slide 6: Key Highlights: KQ Turnaround Efforts
Key Highlights: KQ Turnaround Efforts
Slide 7: 2019 Key Highlights: We continue to pursue our Growth Strategy
2019 Key Highlights: We continue to pursue our Growth Strategy New York Mogadishu Libreville Geneva Rome Malindi Jambojet Boeing 787 brought back IOSA Certification from Oman Air
Slide 8: 2019 Key Highlights: Additional Frequencies
2019 Key Highlights: Additional Frequencies (3) +1 Daily Kisumu (5) +2 Weekly* (10) +2 Daily* New York Mombasa (1) +1 Daily (Q400) (5) +2 Weekly Bujumbura Seychelles (5) +2 Weekly Mauritius Upgrade from E190 to B737 Cape Town
Slide 9: 2019 Key Highlights: We continue to pursue our Growth Strategy
2019 Key Highlights: We continue to pursue our Growth Strategy ASK Growth Ancillary & Others Revenue +17% +34% Passenger Nos Revenues Block Hours +150,000 +6B +9% +6% +12.2%
Slide 10: 2019 Key Highlights: Our People
2019 Key Highlights: Our People Staff Absorption Staff Welfare Reorganisation Improved Medical Coverage Technical & Operations 363 Contract staff & Creche Facilities now in KQ Leadership
Slide 11: H1 2019 Financial Results
H1 2019 Financial Results BK kenya airways 3,
Slide 12: The New Financial Reporting Standard: IFRS16
The New Financial Reporting Standard: IFRS16 Principle: Operating leases are now recognised as assets in financial statements. Provides comparability between companies that lease assets and those that buy IAS 17 IFRS 16 IMPACT • Leases are off • Leases are on balance sheet (Kshs) balance sheet • Ass
Slide 13: Results: Total Revenues Improved
Results: Total Revenues Improved + New routes + New routes + Upgrades & Sublease Chargeable Income Offset lower seats yield 70,000 52,193 2,353 34 240 3,686 58,550 60,000 Turnover KES ‘Mil 50,000 40,000 30,000 20,000 Jan - Jun 2018 Pax Rev Cargo Ancillary Others Jan - Jun 2019
Slide 14: The Trend: Revenues Have Gradually Improved
The Trend: Revenues Have Gradually Improved… 120,000 100,000 80,000 60,000 Kes ‘Mil 58 550 40,000 50,039 50,601 52, 193 20,000 0 2016 2017 2018 2019 1. Investment in New Routes 2. Increased Frequencies 3. Improved Cargo Performance 4. Ancillary Services
Slide 15: Costs Have Increased
Costs Have Increased + Lower fuel (-) Increased Increase in (-) Net prices Flights Employee impact Finance Cost (-) Increased + Increased Cost on accounting ROX Flights ASKs 80,000 56,186 758 1,238 1,604 4,635 2,690 67,112 60,000 Total Cost KES ‘Mil 40,000 20,000 0 Jan - Jun 2018 Fuel Other Docs Ove
Slide 16: Costs: Trend Perspective
Costs: Trend Perspective 140,000 120,000 100,000 Total Cost Kes ‘Mil 80,000 60,000 67,112 58,108 56,372 56,186 40,000 20,000 0 2016 2017 2018 2019 H1 H2
Slide 17: Half Year Loss Before Tax: Official Results
Half Year Loss Before Tax: Official Results 2016 2017 2018 2019 0 1. Increased Costs from New -2,000 Routes & Frequencies -3,992 2. Return of B787 into KQ Service -4,000 Kes ‘Mil -5,771 & Lease Costs -6,000 -8,070 3. Impact on Accounting -8,000 -8,562 -10,000 -12,000 H1 H2
Slide 18: Impact Of One Off Items On Loss
Impact Of One Off Items On Loss ACTUAL IMPAIRMENT ACCELERATED DEPR ACCT STDS LOSS WITHOUT REPORTED LOSS OF FFF E190 ONE OFFS 10,000 8,000 8,520 Kes 1.93B 930 512 488 6,000 6,630 4,000 2,000 0
Slide 19: Summary Consolidated Income Statement
Summary Consolidated Income Statement As at As at June 2019 June 2018 Kes Mil. Kes Mil. Total Revenue 58,550 52,193 Total Operating Costs 61,454 53,218 Operating Loss (2,904) (1,025) Operating Margin % (5.0) (2.0) Total Financial Items 5,278 2,968 Realized losses/gains on fuel derivatives 380 0 Loss
Slide 20: We Continue with efforts to Turnaround
We Continue with efforts to Turnaround Fly More Revenue Jambojet Project Rome-Geneva Growth/Cost Simba Malindi Containment Increased Improved Q400 Kenya Frequencies Productivity Regional Aviation MRO Expansion Policy
Slide 21: Questions
Questions ® Kenya Airways 3