Kenya Power bounces back with Ksh.319M half-year profit

Kenya Power has recorded Ksh.319 million in net earnings for the half-year ending December 2023.

In a statement issued on Friday, the utility company said a strong performance in revenue helped it turn the tide from a net loss of Ksh.1.1 billion in the previous quarter.

It attributed the growth to increased electricity sales, implementation of a cost-reflective tariff and deployment of a Rapid Results Initiative (RRI) meant to fast-track meter installation in line with the nationwide connectivity push.

"I am glad to note that our sales growth was driven by our deliberate effort to grow our customer numbers, having surpassed our connectivity target for the half year period by 13.87% with a total of 225,000 new customers to the grid," said Managing Director and CEO Dr. Joseph Siror.

A volatile shilling however, remains a key headache for the company which says its foreign exchange impact grew by Ksh.11 billion in the same quarter.

Kenya Power was forced to spend a total of Ksh.1.7 billion more in the half-year ending December, raising the company’s total expenditure to Ksh.19.7 billion.

The extra spending by Kenya Power was largely due to an increase in staff cost following the onboarding of new staff to reinforce field operations, which the company says helped to enhance overall operational efficiency and improve service delivery to customers.

Revenue from electricity sales increased by 31 percent from Ksh.86.6 billion to Ksh.113.5 billion, pushing the company back to profitability.

The company’s finance costs also increased to Ksh.7.6 billion, up from Ksh.7.3 billion incurred in a comparable period the previous year to Ksh.15.02 billion. 

It stated that the increase is attributed to the rise in unrealized foreign exchange losses on loan revaluations, a consequence of the weakening of the Kenya shilling against major foreign currencies in which most of the loan portfolio is denominated.

To minimize its cost, Kenya Power said it has embarked on several strategies, including bolstering sales, enhancing system efficiency, enhancing customer experience increasing connectivity across the country.

The power supply company also expressed optimism that the future looks bright following the recent growth of the Kenyan shilling against the US dollar.

"We are happy to note that the shilling is gaining against the Dollar and other major currencies in the current period. We hope that this positive trend continues in the remaining part of the year to ease our forex exposure and enable us to finish the year at a stronger financial position," Dr. Siror noted.