Kenya Power half-year net profit up Kshs. 3.8B on higher electricity sales

Kenya Power has recorded a sharp rise in net profit to Kshs. 3.8 billion for the half year period ending December 31, 2021 compared to Kshs. 138 million realised during the previous year.

The power distributor has attributed the growth in profit after tax to an increase in electricity sales as well as lower operational expenses during the period under review.

The firm says electricity sales rose 8.7% as the firm sold 4,562 gigawatt hour during the half year period of 2021 compared to 366 gigawatt hour sold in the previous year.

Combined with improved system efficiency which rose to 77.13%, the Kenya Power electricity revenue grew to reach Kshs. 69.4 billion.

“This was driven by an increase in customer connectivity, as well as improved supply quality and reliability due to enhanced preventive maintenance works, network refurbishment, and accelerated faulty meter replacements,” the company said in a statement.

As a result of cost management measured deployed to rescue the utility from financial ruin last year, operating narrowed marginally to Kshs. 19 billion from Kshs. 20 billion registered during the first half of 2020.

Non-fuel power purchase costs increased from Kshs. 38 billion incurred in the previous period to Kshs. 40.5 billion mainly due what it says stemmed from additional unit purchases to support increased demand.

“Fuel costs increased from Kshs. 4.6 billion to Kshs. 10.871 billion mainly due to a 314 GWh increase in units purchased from thermal plants to 709 GWh due to low hydrology resulting from delayed rains, and an upsurge in fuel prices.”

The depreciation of the shilling against major currencies which saw unrealised foreign exchange loss during the period under review also so its finance costs rise more than Kshs. 200 million to Kshs. 6.8 billion from Kshs. 6.6 billion.

Aggressive debt recovery from customers and government intervention with state agencies with huge pending bills saw overdue customer debt reduce BY Kshs. 900 million.

The firm added, ‘In the second half of the year, the business will primarily focus on domestic and SME customers who currently account for 67% of the Company’s outstanding debt.”

The electricity distributor has said going forward, it is focusing on reducing billing complaints by improving the entire billing value chain. This is in addition to improving employee accountability and productivity.

Kenya Power now has Kshs. 8.3 billion which it says are from ring-fenced fund projects, receipts from government for last mile project and street lighting programmes and funds for scheduled loan repayment.

Shareholders will not received any interim dividend.