The Journey Ahead

146 Pages·2015·5.01 MB·English

Annu al Repor t &
For the year ended
Financial Statements

31 March 2015
www.kenya-airways.com
The Journey Ahead
Contents
Performance highlights
3
Board of directors
6
Board of directors profiles
8
Chairman’s statement
12
Taarifa ya mwenyekiti
18
Management team
24
Management team profiles
26
Chief executive’s statement
32
Taarifa ya afisa mkuu mtendaji
44
Corporate governance
56
Principal shareholders
59
Corporate social responsibility (CSR)
60
Uwajibikaji wa shirika (CSR)
64
Directors and statutory information
69
Report of the directors
70
Statement of directors’ responsibilities
71
Report of the independent auditors
72
Consolidated statement of profit or loss
and other comprehensive income
73
Consolidated statement of financial position
74
Company statement of financial position
76
Consolidated statement of changes in equity
78
Company statement of changes in equity
80
Consolidated statement of cash flows
81
Notes to the financial statements
82
Proxy form 141
Contents
Performance highlights
3
Board of directors
6
Board of directors profiles
8
Chairman’s statement
12
Taarifa ya mwenyekiti
18
Management team
24
Management team profiles
26
Chief executive’s statement
32
Taarifa ya afisa mkuu mtendaji
44
Corporate governance
56
Principal shareholders
59
Corporate social responsibility (CSR)
60
Uwajibikaji wa shirika (CSR)
64
Directors and statutory information
69
Report of the directors
70
Statement of directors’ responsibilities
71
Report of the independent auditors
72
Consolidated statement of profit or loss
and other comprehensive income
73
Consolidated statement of financial position
74
Company statement of financial position
76
Consolidated statement of changes in equity
78
Company statement of changes in equity
80
Consolidated statement of cash flows
81
Notes to the financial statements
82
1
OUR VISION:
Be the Pride of Africa, by inspiring our people and
delighting our guests consistently.
OUR PURPOSE:
Contributing to the sustainable
development of Africa.
2 KKQQ AAnnnnuuaall RReeppoorrtt && FFiinnaanncciiaall SSttaatteemmeennttss ffoorr tthhee yyeeaarr eennddeedd 3311 MMaarrcchh 22001155
Performance
Highlights
Highlights of the Year
Turnover (KShs’ Million) Operating loss (KShs’ Million) Loss before tax (KShs’ Million)
2014 - 2015 2014 - 2015 2014 - 2015
Down Down
Up 110,161 500.3% ( 16,333) 511.2% (29,712)
3.9% 106,009 (2,721) (4,861)
2013 - 2014 2013 - 2014 2013 - 2014
Net loss (KShs’ Million) Capital and reserves (KShs’ Million) Loss per share (KShs’ Million)
2014 - 2015 2014 - 2015 2014 - 2015
Down (25,743) Down (5,963) Down (17.21)
661.2% (3,382) 121.1% 28,229 664.9% ( 2.25)
2013 - 2014 2013 - 2014 2013 - 2014
Key Financial Statistics
Debt to equity Operating margin (%) Interest cover (%)
2014 - 2015 2014 - 2015 2014 - 2015
Down Down Down
(24.24) (14.8) (5.2)
968.8% 12.2Pts 4.2Pts
2.79 ( 2.6) (1.0)
2013 - 2014 2013 - 2014 2013 - 2014
EBITDAR margin (%)
OUR VISION:
2014 - 2015
Down (2.2)
Be the Pride of Africa, by inspiring our people and 8.4Pts 10.6
delighting our guests consistently. 2013 - 2014
OUR PURPOSE:
Operating Statistics
Contributing to the sustainable
Passengers carried Available seats KM (million) Revenue passengers KM (million)
development of Africa.
2014 - 2015 2014 - 2015 2014 - 2015
4,179,046 15,406 9,793
Up Up Up
12.4% 3,719,590 8.6% 14,188 5.2% 9,309
2013 - 2014 2013 - 2014 2013 - 2014
Cabin factor (%) Cargo uplifted (Tonnes)
2014 - 2015 2014 - 2015
Down 63.6 73,693
Up
2.0Pts 65.6 71,340
3.3%
2013 - 2014 2013 - 2014
3
Performance Highlights (continued)
Turnover by region
2015 22% 2014 22%
Europe Europe
19% 17%
Asia
Asia
Rest of Africa Kenya Rest of Africa Kenya
10% 10%
49% 52%
n 110,161
o
Milli 106,009
s’ 229 (159) (133) 3,949
h
S
K
4,152
2014 2015
n
o
Milli 75,268 76,059
s’ 2,881 270 1,818 1,584
h
S
K
791
2014 Landing 2015
& Handling
n 20,972 24,503
o
Milli
s’
h 1,613 1,054 136 728
S
K
3,531
2014 2015
n
Millio 3480,,000000 39,848 36,967
hs’ 36,000 (4,807) 313 165 1,449
KS 34,000
32,000
30,000
28,000 2,881
26,000
2014 2015
4 KQ Annual Report & Financial Statements for the year ended 31 March 2015
Performance Highlights (continued)
Three year summary of financial highlights
Financial highlights 2015 2014 2013
KShs’ Million US$ Million KShs’ Million US$ Million KShs’ Million US$ Million
Passenger 90,408 1,015.3 90,179 1,049.6 85,099 1,000.9
Freight and mail 9,783 109.9 9,942 115.7 9,714 114.3
Handling 2,080 23.4 1,948 22.7 1,705 20.1
Other 7,890 88.6 3,941 45.9 2,342 27.5
Total 110,161 1,237.1 106,009 1,233.8 98,860 1,162.8
Direct expenditure (76,059) (854.1) (75,268) (876.0) (77,225) (908.3)
Fleet ownership costs (25,932) (291.2) (12,490) (145.4) (11,178) (131.5)
Overheads (24,503) (275.2) (20,972) (244.1) (19,469) (229.0)
Operating loss (16,333) (183.4) (2,721) (31.7) (9,012) (106.0)
Operating margin% (14.8%) - (2.6%) - (9.1%) -
Net finance costs (4,581) (51.4) (1,601) (18.6) (486) (5.7)
Realised (loss)/ gain on fuel
(1,676) (18.8) 972 11.3 602 7.1
derivatives
Unrealised loss on fuel
(5,776) (64.9) - - - -
hedge derivatives
Other costs (1,346) (15.1) (1,511) (17.6) (1,700) (20.0)
Share of results of associate - - - - (230) (2.7)
Loss before tax (29,712) (333.7) (4,861) (56.6) (10,826) (127.3)
Income tax credit 3,969 44.6 1,479 17.2 2,962 34.8
Loss for the year (25,743) (289.1) (3,382) (39.4) (7,864) (92.5)
Loss after tax margin% (23.4%) - (3.2%) - (8.0%) -
Operating statistics 2015 2014 2013
Passengers 4,179,046 3,719,590 3,664,844
RPK's (Million) 9,793 9,309 9,579
ASK's (Million) 15,406 14,188 13,937
Passenger load factor (%) 63.6 65.6 68.7
Cargo tonnes 73,693 71,340 69,871
Pax yield/ RPK inc fuel
9.55 10.47 9.81
Surcharge (Usc)
Employees
Airline 3,463 3,449 3,470
Group 4,002 3,989 4,006
Aircraft in service at year end
Boeing 787-800 6 1 0
Boeing 777-300 3 1 0
Boeing 777-200 4 4 4
Boeing 767-300 5 6 6
Boeing 737-800 6 5 5
Boeing 737-700 4 4 4
Boeing 737-300 4 4 5
Embraer 190 15 15 12
Embraer 170 3 5 5
B737-300 Freighter 2 2 1
B747-400 Freighter - - 1
Total 52 47 43
5
Board of Directors
FROM LEFT TO RIGHT
Joseph Nduva Muli I Ron Schipper I Vincent Rague I Wanjiku Mugane I Evanson Mwaniki
NOT IN PICTURE
Dr. Kamau Thugge
6 KQ Annual Report & Financial Statements for the year ended 31 March 2015
FROM LEFT TO RIGHT
Mbuvi Ngunze I Caroline Armstrong I Joseph Bernadus Veenstra I Pieter Elbers I Alex Mbugua I Amb. Dennis Awori
NOT IN PICTURE NOT IN PICTURE
Catherine Musakali Festus Kingori
7
Board of Directors
Profiles
Evanson Mwaniki In 1998, he joined Bamburi Cement (a Lafarge subsidiary)
as Finance Manager and was promoted to the Finance
Non Executive Chairman (76 years)
Director’s position in February 1999. He held this position up
Mr. Mwaniki holds a Bachelor of Arts (Hons) from the
to March 2002 when he was appointed Managing Director
University of London. He was the General Manager of Shell
Hima Cement Uganda (Lafarge). In May 2006, he moved to
and BP between June 1989 and December 1994. Over
the headquarters of Lafarge in Paris. He first took up the
this period Mr. Mwaniki’s notable achievements included
role of Mission Director in the Group Audit Department for
turning around the Company from a loss position in 1989
six months, and then was appointed Group Vice President
to profitability. He also led the oil industry negotiations
Internal Communications in November 2006. In March
with the Government of Kenya on liberalisation of the oil
2009, he was appointed General Manager for Lafarge’s
industry, leading to actual decontrol in October 1994, and
operations in Tanzania (Mbeya Cement). He joined KQ in
prepared Kenya Shell & BP Kenya (including restructuring
September 2011 as Chief Operating Officer. Mbuvi took over
the organisation) for effective marketing in the new
as Group Managing Director & CEO of Kenya Airways on
(liberalised) business environment.
1st November 2014.
Mr. Mwaniki has represented the oil industry in various
Mbuvi has extensive Board room experience having served
influential forums. These include the Federation of Kenya
on the Boards of Bamburi Cement (from 1999), Hima
Employers and the East Africa Association. Mr. Mwaniki
Cement, Mbeya Cement, and serving as Secretary to the
has also served as a Non-Executive Director on the Boards
East African Cement Producers Association.
of various companies, including British American Tobacco
Kenya (Non-Executive Chairman), East African Breweries
He is currently a Board member of JamboJet Limited, Lewa
Ltd, and Lion of Kenya Insurance Company Ltd. He
Wildlife Conservancy, a member of Board of Governors of
currently serves as Non-Executive Director on the Board of
IATA and a member of the Executive Committee of African
the East African packaging industry Ltd.
Airlines Association. (AFRAA).
On the corporate social responsibility side, Mr. Mwaniki has
Alex Wainaina Mbugua
rendered long voluntary service in educational institutions
including the Alliance High School where he served for Group Finance Director (51 years)
many years as the Chairman of the Board of Governors and Mr. Mbugua was appointed Group Finance Director of the
the Starehe Boys’ School where he currently serves on the KQ Group on 14th July 2008. Mr. Mbugua is an alumnus of
Board of Trustees. Harvard Business School having completed the Advanced
Management Programme (AMP 183) in October 2012. He is
Mbuvi Ngunze
also a Wits Business School MBA graduate and a member
Group Managing Director and Chief Executive of the Institute of Certified Public Accountants of Kenya.
Officer (47 years)
In the past 30 years, during his highly successful career,
Mbuvi holds a Bachelor of Commerce degree accounting
Mr. Mbugua has developed significant knowledge and
option from the University of Nairobi. He is a Chartered
expertise in the fields of finance, strategy and general
Accountant (England and Wales) and is also a graduate of
management. As Group Finance Director, Mr. Mbugua has
the Harvard Business School’s Management Development
overseen certain key milestones for KQ, including the high
Programme (PMD75). He joined Price Waterhouse in
profile 2012 rights issue offer that raised net proceeds of
Nairobi in 1990 and was seconded to Manchester in the
KShs 13.8 billion.
United Kingdom where he was articled. In the UK, he
started off as an Audit Assistant and left 5 years later as an
Prior to his current position, Mr. Mbugua held the position
Assistant Manager. In 1995, he rejoined Price Waterhouse in
of Chief Financial Officer of AngloGoldAshanti-Africa Open
Kenya as Audit Manager, leading audits of various blue chip
Pit Mines, based in Johannesburg SA. Mr. Mbugua held
companies, and also involved in training and recruitment.
board positions at AngloGold Holdings (UK) and also in
8 KQ Annual Report & Financial Statements for the year ended 31 March 2015