Surging sales and new tariffs spark Sh30Bn profit for Kenya Power
Utility Kenya Power has bounced back into the profit territory, reporting Kes30 billion in full-year earnings for the FY ended June 30 compared to the Kes3.2 billion loss suffered in the previous year.
The company attributed the rise in earnings to higher sales, which surged by 21 percent to Kes231 billion up from Kes190 billion in the previous fiscal year.
Kenya Power will be paying its shareholders Kes 0.70 dividend per ordinary share to investors in the register at the close of business on 2nd December 2024.
“This growth is attributed to improved sales primarily from the 447,251 new customers connected to the grid during the year, as well as increased economic activities, particularly in the manufacturing sector,” the company stated in an update.
Kenya Power also credited the strong performance to the rollout of a new cost-reflective base tariff structure in April 2023.
“In the last year, we have connected 447,251 customers to the grid. The number of customers who subscribed to our digital self-service platforms is 2.1 million, up from 1.7 million. This increase in subscriptions is due to a substantial reduction in foot traffic in our banking halls,” explained Kenya Power Managing Director and CEO, Dr. Eng. Joseph Siror.
He added that by building public awareness and fostering a sense of partnership, the utility can address challenges such as vandalism and work toward making power more accessible.
During the year under review, the utility slashed finance costs by Kes24.8 billion largely on account of strengthening shilling. This lead to a Kes7.9 billion gain compared to a loss of Kes16.9 billion in the year ended June 30, 2023.
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“This gain was due to the appreciation of the Kenyan Shilling against the US Dollar and Euro, both of which represent approximately 90 percent of our loan portfolio.”
Owing to rising demand for electricity across the country, Kenya Power saw its power purchase costs shoot up to Kes150.6 billion up from Kes143.6 billion previously.
In Kenya, power purchase is usually priced in USD, implying that in a period when the shilling gained ground against the USD triggered an uptick in the cost of sales.
During the year under focus, the utility’s expenses surged to Kes46.3 billion up from Kes37.3 billion.
“This increase in transmission and distribution expenditure was occasioned by a 92 percent rise in wheeling charges for the expanding transmission network and the recruitment of additional staff to support business operations,” Kenya Power stated.
