SAA Reports Financial Setback in 2023/24 with R354 Million Loss Despite Post-Rescue Recovery

SAA’s audited financial results for the financial year 2023/24 revealed a nett loss of R354 million. This comes after the airline reported a nett profit of R210 million in the previous financial year.

The carrier received its audited financial results during its AGM on July 17. This financial year marked SAA’s second year of operations after exiting business rescue in September 2021.

The carrier claims that the loss reflected the impact of exogenous factors, including R415 million lost in foreign currency translation due to the rand’s volatility.

Other factors, such as 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 negatively impacted revenue and EBITDA.

For the year ended March 2024, SAA reported a negative EBITDA of R90 million, compared with a positive R436 million in 2023. However, the airline generated revenue of R7 billion, reflecting a 23% year-on-year increase.

Despite global aircraft availability constraints during the financial year, SAA operated a fleet of 10 aircraft serving 15 destinations. The volume of flights operated increased by 42% - with significant contributions from flights into Africa and Brazil, in the second half of the financial year.

“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,” said SAA 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.”

Strengthening audit capabilities

The FY2023/24 financial statements mark the last of the outstanding audits from the Business Rescue period, however it was not without auditor amendments.

SAA initially recorded a gain of R431 million, due to the write-off of creditor debt owed during its business rescue, as sundry income. The auditors concluded that 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 airline’s nett result was restated from a profit of R60 million to a loss of R371 million.

To improve confidence in its financial reporting, SAA’s Board launched an Audit Health Plan that standardises key controls, expands internal audit capacity and strengthens collaboration with external auditors.

“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; 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,” said Lamola.