Kenya Power has recorded Sh319 million in profit after tax for the half-year period to December 2023, amid an increase in electricity sales.
This is a comeback from a Sh1.1 billion loss recorded during the previous half-year period to December 2022.
According to the company, the 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 per cent to Sh113.6 billion.
During 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 per cent with a total of 225,000 new customers to the grid,” managing director and CEO, Joseph Siror, said.
Over the six months under review, there was a 240GWh increase in electricity units purchased and dispatched from renewable energy sources.
Following the increased uptake of energy from renewable sources, consumption of thermal generation reduced by 93GWh from 650GWh in a similar period in 2022, to 557GWh.
This led leading to a Sh 2.05 billion reduction in fuel cost charge on customer bills.
Despite the impressive growth in revenue and a significant reduction in fuel cost charge, finance costs increased by Sh7.6 billion, mainly due to unrealised 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 per cent 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 in 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 an increase in depreciation.
This is in addition to higher staff costs following the on-boarding 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 aimed at bolstering sales, optimising revenue collection, and enhancing system efficiency, management said.
“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," Siror said.
This, he said, aligns with the company's core mission of providing affordable, clean, reliable and sustainable power to Kenyan households and enterprises.
