Precision Air posts 2bn/- pre-tax profit

PW cabin crews
Precision Air has posted a pre-tax profit increase of almost 20 per cent but was limited by massive shilling depreciation.

The airline, which its financial year starts at April, posted a pre-tax profit of 1.84bn/- up from 1.55bn/- registered in the previous year, being its first financial results after having been listed last year.

The profitability was lifted by increasing capacity offered to the market by 46 per cent that pushed passengers uplifted by 24 per cent compared to previous year after the airline deployed larger aircraft on regional routes.

"This capacity has been taken up very well thus bolstering the company's performance and reinforcing the (airline's) position in the industry," the designated nation carrier said.

The airline said in a statement released yesterday: "We are pleased to report that despite the many challenges faced by the aviation industry, Precision Air recorded impressive performance during 2011/12."

Orbit Securities Head of Dealings and Operations, Juventus Simon said the airline industry last year was challenging one as despite the Precision Air having posted impressive revenue, it ended up getting very little.

"Last year, many airlines passed turbulence weather and posted revenue decline or losses including the world heavy weight, but Precision (Air) emerged on a strong note," Mr Simon told the 'Daily News'.

He said poor exchange rate and financial cost of 7.65bn/- also have contributed heavily on the airline to register a marginal profit though for long term investors, the airline's share is a good buy.

"I think share price remain at the current level (of 470/-), but the profit attained is encouraging, if I have to put them in scale is 50/50," the stockbroker said. 

PW total revenue during the year under review reached 163.06bn/- but the cost of sales was at 117.06bn/-, which analysts said the industry nature of business is complicated as it left the airline to remain with a relative low income.

In the same year, due to exchange rate fluctuations the airline lost 3.07bn/- up from 2.25bn/- of previous year, which is 38 per cent due to weaken shilling in the corresponded financial year.

Nevertheless, the airline said it has embarked on a fleet expansion programme where it order five brand new ATR 600 latest series into the fleet and older series ATR 42-320 which have delivery period of three-year.

"The increase of capacity is required to facilitate the execution and achievement of the airline's five years strategic plan," the airline said in the release without mentioning dividends offer.

Tanzania Securities Chief Executive Officer, Mr Moremi Marwa said even though Precision Air did not declare dividends, the profit they made was "better than nothing (loses)."
Source: The Daily News, http://www.dailynews.co.tz, reported by Abduel Elinaza
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