National carrier, Kenya Airways has become the latest listed company to issue a profit warning. Capital Markets Regulations require listed companies to issue profit warning to shareholders should it expect profitability to decline in comparison to a previous financial period.
In a notice signed by the airline’s Board Chairman, Michael Joseph, the carrier says earnings of the current financial year are expected to be 25 per cent lower than reported in the same period in 2018. “This announcement is based on the forecasted financial results of the Group for the year ending December 31, 2019.”
The Group, however, says it realized improved revenue growth in the year, its profitability was constrained by competition in the airline’s area of operation, which increased pressure on pricing.
“In addition, the adoption of the new IFRS 16 rules in 2019, has required a significant adjustments to both the profit and loss statements and balance sheet for the current financial year,” read part of the notice.
The airline, yesterday announced the appointment of its subsidiary’s CEO, Allan Kilavuka to the position of acting CEO following the resignation of Sebastian Mikosz who is due to leave at the end of the year.
“The Board and Management are undertaking several key strategic initiatives to improve financial results of the company going forward both in 2019 and in the years ahead,” concluded the notice.