Dar es Salaam. The ground handler, Swissport Tanzania is setting out plans to reduce its operating costs amid the 25 percent plunge of its 2019 net profits and air transport flights cut due to the Covid-19 pandemic caused by the new coronavirus.
Chief executive officer Mrisho Yassin said this drop was rather expected considering the discount rates that they renewed with their customers in 2018.
The company has already issued a profit warning for 2019 to its shareholders, attributed by cessation of Fastjet and Etihad Airways operations in Tanzania and loss of some businesses to the competition and a drop of yield per aircraft handled due to the ongoing price pressure.
He said, as they expected a drop in profits for the year 2019 the company had a positive prospects for 2020 before the emergence of Covid-19.
“The decline in profits for 2019 was expected due to the discounted rates we offered during the year, however the unfortunate emergence of Covid-19 will also have a significant impact on our business this year,” he said.
Mr Mrisho said the cut and suspension of local and international flights in the country will eventually lead to the decrease in cargo volume handled thus affects the company revenues.
Though he did not mention they expect to cut spending by what percent the Swissport boss said they are currently doing an impact assessment.
“We are currently doing a financial assessment on the impact of the pandemic to our business and splashing our spending will be one of the mitigating solution to grounds our financial positions,” he added.
Swissport is a listed company at the Dar es Salaam Stock Exchange (DSE) whose share price is currently at Sh1,440 and an equity capital of Sh51.84 billion.
To the firm’s stock investors the CEO said they should not panic considering the pandemic has affected businesses of all sectors worldwide.
Moreover, in 2018 the company net profits was Sh7.45 billion, and the directors approved a dividend of Sh3.73 billion equal to Sh103.61 per issued and fully paid in share.