Markets & Finance

Ex-Blackwater man reaps from Phoenix Aviation takeover


Mr Erik Prince, the Frontier Services Group chairman. AFP PHOTO

Phoenix Aviation accounted for a fifth of Frontier Services Group (FSG) revenues in five months of 2014.

FSG, a logistics firm based in Nairobi and Hong Kong, said its newly acquired Phoenix Aviation last year earned Sh787.4 million in revenues equivalent to 21 per cent of Sh3.7 billion group revenues.

FSG, chaired by Blackwater founder Erik Prince, says Phoenix’s contribution would even have been larger if the local airline had been bought at the beginning of 2014.

“The acquired business contributed revenue of approximately Hong Kong dollars 65.9 million (Sh787.7 million) and net profit after tax of approximately HK dollars 5.45 million (Sh65.1 million) to the group for the period from July 28, 2014 (date of acquisition) to December 31, 2014,” disclosed FSG annual report for 2014.

“If the acquisition had occurred on January 1, 2014 the contribution to the consolidated revenue and net profit for the year ended December 31, 2014 would have been approximately HK dollars 162.4 million (Sh1.94 billion) and HK dollars 8.6 million (Sh102.5 million) respectively.”

FSG bought a 49 per cent stake in Phoenix Aviation for Sh1.2 billion which was meant to support its logistics business that services government, humanitarian agencies, NGOs and oil and gas exploration firms.

The company said it will grow revenues by buying other companies. “We are especially pleased with the investment we made in Phoenix Aviation, a key element to our core growth strategy.

‘‘This transaction is an example of our commitment to becoming the most capable, most well regarded speciality aviation and logistics business serving the African continent. We will continue to evaluate strategic opportunities to increase our geographic and customer diversification throughout Africa,” said Mr Prince.

FSG has already entered into acquisition talks with a logistics company based in the Democratic Republic of Congo, which is meant to give it access to the vast central African region.

The company has expanded its local workforce and advertised various positions in late February.

FSG said that it could not give a breakdown of its local workforce but its annual report states that it had 303 employees in 2014 up from 78 the previous year.