[quote=obiero]For the half year ended 30.06.2018, Kenya Airways Ltd recorded Total revenue of Kshs 55,200,000,000.00, and the company’s
Operating Profit amounted to Kshs 3,300,000,000.00 as per the Exchange Bar
Operating margin = (Operating Profit /Revenues) x 100.
= (3,300,000,000.00 / 55,200,000,000.00) x 100 = 5.97%
Out of every Kshs1.00 Kenya Airways collected as revenue in the year, it retained Kshs 0.06 as operating profit after paying for the operational expenses incurred in getting that Kshs 1.00
It is out of that 6cents that Kenya Airways is to pay out financial costs as well as taxes and the balance retained as 'profits' for share holders.
Should we choose to focus only on the company’s core business operations, Kenya Airways operational performance for the just ended period is improving compared to the previous periods but far below that of 2007, where the operating margin was 13.1%
On average, out of every kshs1 in revenues that Kenya Airways collects annually, it had in years past paid more and more in operational costs. It could imply that the company was having difficulty in bringing in revenues, or that the management was facing increasing challenges in improving the company’s Operational Efficiency.
A lot is learnt by observing Operating profits trend over time, but it should not be the only factor one considers when planning whether or not the Kenya Airways shares are a viable investment, as KQ prepares to marry KAA
http://www.oagkenya.go.k...enya-airports-authority[/quote]
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