Friday, 9 November 2012

Kingfisher Airlines net loss, as expected, has increased 61 per cent to Rs 753 crore



Kingfisher Airlines net loss, as expected, has increased 61 per cent to Rs 753 crore (Rs 7.53 billion) for the second quarter, compared to Rs 468 crore (Rs 4.68 billion) a year ago.



Total income plummeted eight times to Rs 200 crore (Rs 2 billion) from Rs 1,552 crore (Rs 15.52 billion).

The operating loss was Rs 202 crore (Rs 2.02 billion), and due to adjusting for finance cost of Rs 401 crore (Rs 4.01 billion), a one-time cost of Rs 448 crore (Rs 4.48 billion) due to re-delivery of cost and restructuring, the net loss was at Rs 753 crore (Rs 7.53 billion.

The company has a significant debt of Rs 8,000 crore (Rs 80 billion) to a consortium of Indian bankers; the company has not been able to service the interest costs for most part of the last year.

The UB-Group-owned airline said it was continuing with its holding plan and was preparing to file a comprehensive revival plan.

Red flag

Raising concern on the financials, Kingfisher's auditors said the carrier's second-quarter net loss could have been much higher, at Rs 1,032 crore (Rs 10.32 billion), had it followed 'generally accepted accounting standards' for certain income and expenses.

Its 'reserves and surplus' would have been a debit of Rs 12,155 crore (Rs 121.55 billion) as on September 30, against a debit of Rs 7,339 crore (Rs 73.39 billion) reported, auditors said.

The auditors have drawn attention to financial statements being prepared on a 'going concern' basis despite net worth having been eroded.

"The appropriateness of the said basis is dependent on the company's ability to obtain restoration of the air operator's permit, infuse funds, rescheduling of debt and resuming normal operations," the auditors said.

Kingfisher's Q2 revenues plunged to Rs 200 crore (Rs 2 billion), from Rs 1,553 crore (Rs 15.53 billion) in the same period last year because of disruption in operations and eventual suspension of its licence by aviation regulator DGCA.

The report has also highlighted the method of accounting of costs incurred on major repairs and maintenance of aircraft being taken on operating lease of "Rs nil".

"In our opinion, this treatment is not in accordance with generally accepted accounting standards prevalent in India [ Images ]," the auditors said in their limited review report.

The carrier has said it is in discussions with various stakeholders to ensure that there are no future disruptions and expects to resume operations in the near future.

The auditors further said that Kingfisher, in past, has included as 'other income' certain subsidy provided by one of its suppliers, although the company's auditors at that time had opined this treatment in non-accordance with the government's Accounting Standards.

The current auditors have also concurred with that view.











India's Kingfisher shares jump on United Spirits, Diageo deal
CNBC.com
MUMBAI (Reuters) - India's debt-laden Kingfisher Airlines <KING.NS> extended gains after Reuters reported its chairman Vijay Mallya clinched a deal to sell a stake in United Spirits <UNSP.NS> to Diageo <DGE.L>, on hopes the money raised could be used ...
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Diageo-United Spirits deal independent of Kingfisher Airlines issue: Vijay Mallya
Economic Times
Seeking to clarify speculation on what the deal could mean for the debt-riddenKingfisher Airlines, Mallya said, "We have multiple businesses and each business operates independent of each other. There is no cross contamination. There never has been, ...
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Economic Times
Not much in it for lenders
Times of India
MUMBAI: Bankers to Kingfisher Airlines face the tough choice of taking a large haircut through a one-time settlement or work out a very long-term restructuring package which would mean waiting for years before they see their money. A decision would ...
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'Kingfisher's Rs 753-cr loss could have been more'
Rediff
Kingfisher Airlines net loss, as expected, has increased 61 per cent to Rs 753 crore (Rs 7.53 billion) for the second quarter, compared to Rs 468 crore (Rs 4.68 billion) a year ago. Total income plummeted eight times to Rs 200 crore (Rs 2 billion) from ...
See all stories on this topic »

Rediff
Nifty ends below 5700; Kingfisher locked in upper circuit
Economic Times
Kingfisher Airline Ltd extended gains after Reuters reported its chairman Vijay Mallya clinched a deal to sell a stake in United Spirits to Diageo, on hopes the money raised could be used to revive the carrier. The stock rose almost 5 per cent and is ...
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Economic Times
Kingfisher Capital CLO sells 5% stake in Nava Bharat Ventures
Economic Times
About 45.33 lakh shares, representing little over five per cent in the company, were sold byKingfisher Capital on November 7, according to a regulatory filing. The shares were offloaded through open market transaction on the National Stock Exchange.
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Kingfisher Stock Rating Reaffirmed by Jefferies Group (KGF)
Daily Political
Kingfisher (LON: KGF)'s stock had its “buy” rating reaffirmed by research analysts at Jefferies Group in a report released on Friday. They currently have a $5.27 (330 GBX) target price on the stock.Kingfisher opened at 284.90 on Friday. Kingfisher has ...
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