(Bloomberg) -- Kenya Airways Plc posted a first-half profit for the first time in 10 years as it increased passengers and cargo volumes.
KQ, as the airline is more commonly known, made a profit of 513 million shillings ($3.98 million) after revenue jumped 22% from a year earlier. Passenger numbers increased 10% in the six months through June.
“We are not there yet, but this is a significant milestone that indicates our intention to continue transforming this organization to a fully stable and sustainable airline so this is something we want to celebrate,” Chief Executive Officer Allan Kilavuka said Monday during a briefing.
The carrier with a 48.9% state-owned also benefited from the strengthening of the Kenya shilling. The currency has gained almost 21% against the dollar so far this year, compared with depreciation by a similar margin last year.
That helped the company book a foreign exchange gain of 5.3 billion shillings in the first half, compared with losses previously.
In January, Kenya’s markets regulator extended the trading suspension of Kenya Airways shares by a further 12 months. The stock hasn’t traded since July 2020 to allow the company to complete a restructuring process.
KQ is in the process of picking a strategic partner to help recapitalize the airline and expects to make an announcement by the end of the year.
“The organization needs injection of capital, mainly to reduce the debt level,” Kilavuka said. “We expect that this partner will have a lot of best practices that could help us improve as well.”
The airline owes about $1 billion and benefited when the government converted about half a billion into Kenya shillings, which reduced the impact of foreign exchange fluctuations, Kilavuka said.
Plans to set up a pan African group with South African Airways and several other carriers have been slowed by restructuring of the two companies, he said.
“It took a lull, but we are still cooperating in other areas,” Kilavuka said. “Once we finish this discussion on the strategic investor, then we can start in earnest talking about resetting it.”
(Updates with debt from eighth paragraph)
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