Thursday, 31 May 2012

Kingfisher Airlines net loss trebles in Q4 on high fuel costs, falling rupee


Bangalore, May 31:
Kingfisher Airlines net losses have trebled during the fourth quarter of last fiscal because of higher fuel costs and a falling rupee.
Net losses increased to Rs 1,151.52 crore, while income from services more than halved to Rs 741.27 crore, the airline's press statement said.
Notably, the fourth quarter losses contributed to almost 50 per cent of the company's total losses for 2011-2012. For the entire year, the company's losses more than doubled to Rs 2,328 crore (Rs 1,027.4 crore). The company's performance was impacted primarily due to additional fuel cost and additional cost due to depreciation of the Rupee and lower revenue generation due to reduction of operational capacity in an attempt to contain losses, the statement said.
During the fourth quarter of 2011-12, the company's fuel expenses came down by 18 per cent to Rs 545.12 crore because of reduction in operations. For the full year, fuel expenses grew nearly 30 per cent to Rs 2,945.89 crore.
In the filing with the Bombay Stock Exchange, the auditors have noted that the company has “incurred substantial losses and its net-worth has been eroded”. Aviation analysts and auditing experts pointed out that though the auditors were being conservative in their reporting, the company has sought to differ with them in a bid to help their balance sheet. For instance, the company said in the BSE filing, “Deferred Tax Asset is recognised on account of unabsorbed depreciation and business losses for the year ended March 31, 2012, aggregating to Rs 1,118.08 crore. The management is of the opinion that there is a virtual certainty supported by convincing evidence against which such deferred tax will be realised, notwithstanding that the auditors have opined to the contrary”.
Kingfisher Airlines stock price closed at an all-time low of Rs 10. 50, down nearly five per cent on Thursday.

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