April 23, 2019 / 6:45 AM / 6 months ago

Cash-strapped Fastjet forecasts marginal profit in 2019

(Reuters) - Low-cost African airline Fastjet Plc reported a narrower first-quarter operating loss on Tuesday and said it expected to be marginally profitable in 2019, after a cash crunch nearly drove it into administration last year.

The airline has faced numerous issues related to its dwindling cash pile and was saved from going under after striking a deal to raise funds late last year.

Fastjet was also forced to divest operations in Tanzania, its home market, after battling tough trading conditions there.

“Whilst these cost-cutting measures were at times painful, our newly-sized operations provide Fastjet with a materially enhanced strategic position to pursue the growth opportunities on offer on the continent,” Chief Executive Officer Nico Bezuidenhout said.

The company reported a first-quarter underlying net operating loss of about $0.2 million, excluding a one-off item of $6.2 million related to its Zimbabwe operations.

Fastjet had posted a loss of $7.8 million a year earlier.

The company said its cash balance at March 31 was $2.9 million, of which $1.5 million was restricted cash held inside Zimbabwe.

However, it warned that its ability to repatriate funds from Zimbabwe and volatility of the Zimbabwean currency were “material risks” to its business in relation to liquidity and foreign exchange translation impacts.

Reporting by Shashwat Awasthi in Bengaluru; Editing by Gopakumar Warrier, Bernard Orr

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