Deferred tax liability lowers Kingfisher's loss

Mumbai: Kingfisher Airlines has seen a decline in its losses for fiscal 2007-08, thanks to the deferred tax liability of over Rs 600 crore, according to the company’s annual report.
The report, which was presented at the UB Holdings annual general meeting in Bangalore on December 26, says the deferred tax liability enabled the Vijay Mallya-owned Kingfisher Airlines to reduce its losses in FY2008.
Kingfisher, a subsidiary of UB Holdings, suffered a loss of Rs 1,013 crore, but deferred tax - an entitlement of Rs 604 crore arising from the merger of low-fare carrier Deccan Airways - brought this figure down to Rs 408 crore. The total revenues were pegged at Rs 2,751.4 crore.
The deferred tax was a result of the unabsorbed losses and depreciation incurred by the commercial airline division, which was transferred to Deccan Aviation, the earlier avatar of Kingfisher Airlines. The management of Kingfisher Airlines is certain about future profits, against which the deferred tax assets can be realised. The chairman Vijay Mallya recently stated that the airline will break even in 2009.
Subhash Gupte, vice-chairman, UB group and director of the airlines, said the losses resulted from soaring fuel and high sales taxes, with states levying anywhere between 34% and 40%.
31/12/08 M Padmakshan/Economic Times

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Categories: Kingfisher Dec 2008