Kenya Power has recorded Sh319 million in profit after tax for the half year period to December 2023, marking an improvement from a loss of Sh1.1 billion recorded during the previous half year period to December 2022.
The improved profitability was driven by growth in revenue resulting from increased electricity sales as well as the implementation of a cost reflective tariff. During the period under review, revenue from electricity sales grew by 31 percent to Sh113.6 billion.
In the period, the company commenced the deployment of a Rapid Results Initiative (RRI) which is meant to fast track meter installation for new connections across the country as a measure to drive customer connectivity and grow electricity sales.
“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 percent with a total of 225,000 new customers to the grid,” said Kenya Power’s Managing Director and CEO, Dr. (Eng.) Joseph Siror.
Also Read: Kenya Power Targets 400,000 New Customers in Universal Connectivity Drive
Over the six-month period under review, there was a 240GWh increase in electricity units purchased and dispatched from renewable energy sources. Following increased uptake of energy from renewable sources, consumption of thermal generation reduced by 93GWh from 650GWh in the similar period in 2022 to 557GWh leading to a KShs. 2.05 billion reduction in fuel
cost charge on customer bills.
Despite the impressive growth in revenue and significant reduction in fuel cost charge, finance costs increased by Sh7.6 billion, mainly due to unrealized foreign exchange losses on loan revaluations as a result of the depreciation of the Kenyan shilling against major foreign currencies.
Foreign currency denominated loans account for 90 percent of the Company’s loan portfolio.
“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,” said Siror.
Similarly, operating costs increased by Sh1.7 billion during the period under review to Sh19.7 billion, driven by higher electricity wheeling charges as provided in the cost-reflective electricity tariff and increase in depreciation.
This is in addition to higher staff costs following onboarding of new staff to reinforce field operations and enhance overall operational efficiency to improve
service delivery to customers.
To further sustain profitability, the company will intensify the deployment of initiatives that are aimed at bolstering sales, optimizing revenue collection and enhancing system efficiency.
“While we are keen to onboard new customers, our immediate focus is to enhance customer experience. Therefore, in the period ahead, we will step up our investments in the network to
fortify its reliability. This aligns with our core mission of providing affordable, clean, reliable and sustainable power to Kenyan households and enterprises,” said Siror.
