Latest news with #R210m
The Citizen
a day ago
- Business
- The Citizen
SAA is bleeding money
SAA suffered a net loss of R354m, after R210m profit the previous year. The recovery of the airline as a global aviation brand is on track, says its CEO. Picture: Moneyweb Transport Minister Barbara Creecy's words that South African Airways (SAA) was finally in a position to contribute economic value weren't even cold when audited financial results for the financial year indicated the opposite. While the company generated revenue of R7.0 billion – a 23% year-on-year increase – the group also reported a net loss of R354 million, compared to a profit of R210 million in the prior year, SAA spokesperson Vimla Maistry said. SAA's financial standing This follows the annual general meeting on 17 July, which received the audited financial results for the year ended 31 March 2024 (FY2023-24). 'Besides the R415 million foreign-currency translation loss due to the rand's volatility, these results reflect the impact of exogenous factors on the airline,' Maistry said. 'This includes the effects of the Ukraine conflict, which pushed jet fuel costs from R1.3 billion to R1.9 billion; a global shortage of aircraft, which drove leasing costs up by over 30% in 2023; and delays in the delivery of budgeted aircraft, all of which negatively impacted revenue and Ebitda (earnings before interest, taxes, depreciation and amortisation). 'The latter declined from a positive R436 million in the prior year, to a negative R90 million.' Maistry said SAA's cash and cash equivalents position remained strong at R1.4 billion at the end of FY2023-24. The airline has zero borrowings and R6.4 billion in equity. 'Despite global aircraft availability constraints, during 2023- 24, SAA operated on average, with a fleet of 10 aircraft serving 15 destinations. The number of flights flown increased by 42%, with a significant increase in flights into Africa and routes from Johannesburg and Cape Town to Sao Paulo starting in the second half of the financial year,' she said. ALSO READ: Man who stole airport equipment that prevents mid-air collisions sentenced to 10 years Uncertainty in SAA's resuscitation SAA Group CEO John Lamola said the results detail a past phase of uncertainty in the airline's resuscitation. 'Since then, we have entered a period of structured and strategic reconstruction of the business, focusing on institutionalising robust governance and management systems, while implementing plans on fleet modernisation and route network expansion,' he said. Lamola said the financial statements mark the last of the outstanding audits from the business rescue period, with all prior-year adjustments resolved. 'SAA recognised a R431 million gain by derecognising business rescue creditor obligations and recording this amount as sundry income,' he said. 'However, the auditors concluded this amount should have been recognised as a prior-period adjustment to retained earnings, rather than in sundry income in the current year. 'As a result, the group's net result has been restated from a profit of R71 million to the reported loss of R354 million.' ALSO READ: SAA hit by 'significant' cyberattack disrupting internal operations 'They got money for mahala' Lamola said to reinforce its financial reporting, SAA's board has launched an Audit Health Plan that standardises key controls, expands internal audit capacity and strengthens collaboration with external auditors. 'After six consecutive audits in three years, SAA is firmly back on track to meet all statutory reporting deadlines and to devote its efforts towards improved audit outcomes,' he said. Economist Dawie Roodt said it was 'a big mess' that could no longer be whitewashed. 'I don't know what the accounting error is, but I suspect it has to do with impairment. Usually, if there are assets that you think you can't realise, then you write off the assets.' Roodt said SAA got an equity injection to try to rescue it. 'They got money for mahala. They tried to whitewash it,' he said. Political expert Piet Croucamp said bookkeeping got the better of the chief financial officer at SAA. 'It just proves what we have been saying for years. SA should not have a national carrier. They neither have the political will, nor the skills to manage the entity. 'They keep on trying and the public is paying for it,' he said. READ NEXT: SAA slips back into loss as fuel and plane leasing costs spiral
The Citizen
4 days ago
- Business
- The Citizen
SAA slips back into loss as fuel and plane leasing costs spiral
Reports a R352m loss for the last financial year after a R210m profit in 2024. The recovery of the airline as a global aviation brand is on track, says its CEO. Picture: Moneyweb Soaring fuel prices and a 30% increase in plane leasing costs pushed airline operator South African Airways (SAA) into a R352 million loss for the year to March 2025, despite a 23% increase in revenue to R7 billion. This follows a R210 million profit the prior year. Rand volatility resulted in currency translation losses of R415 million. The airline was hit with several external shocks, such as a 46% increase in fuel costs to R1.9 billion due to the Ukraine conflict and a global shortage of aircraft which pushed up leasing costs by 30%. Delays in the delivery of budgeted aircraft had a negative impact in revenue and earnings before interest, tax, depreciation and amortisation (Ebitda), which reversed from a positive R436 million in 2024 to a negative R90 million in 2025. The cash position remains strong at R1.4 billion at year-end. It also has zero borrowings and R6.4 billion in equity. The airline received R50.7 billion in government bailouts between 2007 and 2022. ALSO READ: Has SAA turned the corner or is it flying too close to the sun? Routes and aircraft SAA currently serves 17 destinations, including two intercontinental routes to Perth in Australia, and São Paulo in Brazil. In January this year it extended services to Dar es Salaam in Tanzania and Lubumbashi in the Democratic Republic of Congo, bringing its total coverage to 17 destinations in 12 countries. Through the Star Alliance with 25 other member airlines, it provides services to 192 countries. In the 2024 financial year it operated just 10 aircraft serving 15 destinations. The number of destinations increased 42% over the last financial year, with new flights into Africa and flights to São Paulo from both Johannesburg and Cape Town. Earlier this year it expanded its fleet to 20, announcing plans to expand this further to 25 before yearend. This compares with its fleet of 49 aircraft in 2019, prior to being placed in business rescue. The airline was taken out of business rescue in 2021. The airline's waning financial position was aggravated by the Covid shutdowns in 2020, resulting in the suspension of services to long-haul destinations such as London, New York and Hong Kong. ALSO READ: SAA quietly lifts off as load factors show signs of recovery 'Strategic reconstruction' 'These results detail a phase of intense uncertainty in the resuscitation of SAA as the assumption of the company's control by the strategic equity partner was awaited,' says Group CEO John Lamola. 'Since then, we have entered a period of structured and strategic reconstruction of the business, focusing on institutionalising robust governance and management systems, whilst implementing plans on aircraft fleet and route network expansion and elevation of customer experience'. The latest financial results mark the last of the outstanding audits from the business rescue period, with all prior year adjustments now resolved. A case in point is R431 million recognised as a prior year adjustment to retained earnings rather than sundry income in the current year. This amount relates to business rescue creditor obligations. ALSO READ: SAA heading for crash unless equity partner comes on board Audit Health Plan To strengthen its financial reporting, SAA says it has launched a programme called Audit Health Plan to standardise key controls, expand internal audit capacity and strengthen collaboration with external auditors. 'After six consecutive audits in three years, SAA is firmly back on track to meet all statutory reporting deadlines, and to devote its efforts towards improved audit outcomes,' says the company in a statement. Despite the loss for the year, Lamola believes SAA is on the recovery track. 'We have strengthened the channels of our revenue streams and cost containment measures; we have a debt-free, asset-rich balance sheet that is supporting the steady growth of the airline and the recovery of SAA as a global aviation brand.' This article was republished from Moneyweb. Read the original here.
IOL News
4 days ago
- Business
- IOL News
SAA swings into R354 million loss but claims improved financial health
The latest financial statements were the last of the outstanding audits from the business rescue period, with all prior-year adjustments now resolved. Image: IOL South African Airways (SAA) has declared a loss of R354 million for the 2023/24 financial year while simultaneously announcing a "debt-free, asset-rich balance sheet" that's poised to support its recovery as a global aviation brand. CEO John Lamola portrayed these results as a snapshot of resilience, highlighting the airline's notable increase in revenue and operational efforts despite external pressures. In the audited financial results reflecting the airline's second year of operations since its exit from business rescue in April 2021, SAA on Thursday reported that it had generated revenue of R7 billion, a 23% year-on-year increase for the group. However, currency fluctuations and various 'external' factors impacted operations, resulting in a net loss of R354m for the year. The group reported a profit of R210m the previous year. The latest financial statements were the last of the outstanding audits from the business rescue period, with all prior-year adjustments now resolved. These include SAA recognising a gain of R431m in the current year by de-recognising business rescue credit obligations and recording the amount as sundry income. The group's auditors said this amount should have been recognised as a prior-period adjustment to retained earnings, instead of sundry income in the current year. Due to this correction, the airline's net result was restated from a small profit of R60m to a loss of R371m. Lamola said the results detailed a phase of intense uncertainty in the resuscitation of SAA as the assumption of the company's control by the strategic equity partner was awaited. 'Since then, we have entered a period of structured and strategic reconstruction of the business, focusing on institutionalising robust governance and management systems, whilst implementing plans on aircraft fleet and route network expansion and elevation of customer experience,' he said. SAA said that outside of a R415m foreign-currency translation loss because of the rand's volatility, the final result also reflected external factors including the impact of Russia's invasion of Ukraine, which pushed jet fuel costs from R1.3bn to R1.9bn during the period. It was also hit by a global shortage of aircraft, which increased leasing costs by more than 30%. These elements negatively affected revenue and earnings before interst tax depreciation and amortisation (EBITDA) , with the latter declining from a positive R436m in the prior year to a negative R90m. The group noted that its cash and cash equivalents remained strong at R1.4bn with zero borrowings and R6.4bn in equity. 'The FY2023/24 results reflect significant progress in SAA's financial health. We have strengthened the channels of our revenue streams and cost containment measures,' Lamola said. The number of flights flown also jumped by 42%, with a significant increase in flights into Africa and routes from Johannesburg and Cape Town to Sao Paulo starting in the second half of the financial year. SAA said to improve its financial reporting, the board launched an Audit Health Plan that standardises key controls, expands internal audit capacity and improves collaboration with external auditors. BUSINESS REPORT
