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SAA's losses balloon to R4.5bn

Mar 27 2017 19:33

Cape Town – SAA’s losses have escalated once more - to R4.5bn. This is R1bn higher than reported just ten days ago. 

In the latest group income statement that SAA provided to Parliament’s standing committee on finance, it said the national carrier posted a loss of R4.490bn versus a budgeted loss of R1.4bn. 

“It is important to highlight that the budgeted loss did not take into account the expected movement of the exchange rate,” SAA said in an introduction to the income statement. "This was because of the volatility it can present to the financials of the company; the best practice is not to budget for it." 

READ: SAA bleeding billions more than first reported

If further said that the company continues to make losses and that the losses are “largely driven by significant shortages of revenue and persistently high base cost". 

"SAA needs to address its operating cost as well as revenue management in order to operate at least at break-even EBIDTA (earnings before interest, taxes, depreciation, and amortisation) level," SAA continued. "The review process focus is both on revenue and costs." 

DA spokesperson on finance Alf Lees said in reaction to the information that the new figure of R4.5bn is significantly higher than the R3.5bn revealed only ten days ago "and much higher than the R1.7bn estimated in September 2016".

“This is an increase of R1bn in the space of ten days and an increase of R2.8bn in the space of six months," Lees said.

READ: SAA investigations top R21m in 4-year period 

“With a full month of figures left to be reported on, this figure of R 4.5 billion could experience yet another significant increase.” 

Fin24 reported on March 17 that SAA had revised its budgeted loss forecast for 2016/17 to R3.5bn from an earlier estimate of R1.7bn, documents sent to Parliament showed.

SAA will appear before the standing committee on Finance on Wednesday March 29 to report on among other things on its quarterly report. 

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