Kenya Power & Lighting Company Limited (Kenya Power or KPLC), listed on the Nairobi Securities Exchange under the share code KPLC, is an electricity company with geothermal, hydro and thermal power generation as well as power generated from solar and wind sources interests.
Kenya Power’s electricity sales improved by 2.3% to 8,459 million units against 8,727 million from the equivalent period a year earlier. This contributed to a 3.8% sales revenue to Shs. 95,463 million up from Shs. 91,952 million recorded the previous year. Finance income surged by 117.39% to Shs. 100 million for the year under review. The company priorities concentrating on arrangement of value control supply by reinforcing the power circuit and streamlining inward procedures to enhance the client experience.
The following is an excerpt from the CEO’s statement:
During the year under review, the net profit before tax decreased by 59.7% to Shs.3,089 million from Shs.7,656million (restated) in the previous year. This was mainly attributable to increased transmission and distribution costs as a result of maintenance activities on the expanded network.
Electricity sales grew by 2.3% from 8,272 million units the previous year, to 8,459 million units in the period under review due to an expanded customer base. This, combined with an improved average yield, led to 3.8% an increase in sales revenue, from Shs. 91,952 million the previous year to Shs. 95.463 million.
Power purchase costs, excluding fuel and foreign exchange costs, increased by Shs. 2,593 million from Shs. 50,202 million the previous year, to Shs. 52,795 million. This is attributable to an increase in units purchased from geothermal sources in the year by 602GWh or 13.5% from 4,451 GWh the previous year to 5,053 GWh.
The fuel cost decreased by Shs.485 million (or 2.0%) from Shs. 24,076 million the previous year to Shs. 23,591 million due to improved energy mix following less utilization of expensive thermal plants during the year.
Transmission and distribution costs increased by 14.1% from Shs. 34,745 million incurred the previous year to Shs. 39,628million. The rise was attributed to higher debtors’ provisions, depreciation due to increased capital investment and the rising cost of doing business.
Finance costs and interest Income
Finance income increased to Shs.100million during the year compared to Shs. 46 million realized the previous period due to increased bank balances. On the other hand, finance costs increased by 29.3% from Shs. 6,040 million the previous year to Shs. 7,807 million. This was caused by use of short-term borrowings to bridge cash flow shortfalls.
The Company recorded a net profit before tax of Shs. 3,089 million compared to Shs. 7,656 million (restated) in the previous year, a decrease of Shs. 4,567 million or 59.7%.The decrease was mainly attributed to increase in transmission and distribution costs by Shs.4,567million and a rise in finance costs by Shs 1,767million.
The net profit after tax was Shs. 1,918 million compared to Shs. 5,280 million the previous year, after taking into account a tax charge of Shs. 1,171million.
As a matter of priority, the Company’s management team is focusing on provision of quality power supply by strengthening our electricity network and streamlining internal processes to improve customer experience. In addition, we have embarked on implementation of the Company’s new Corporate Strategic Plan which lays emphasis on improving employees’ productivity; providing adequate, quality and reliable power supply; improving service delivery; and ensuring financial sustainability. The strategy was formulated in cognizance of the dynamic business environment, technological advancements and anticipated policy changes in the energy sector.
I am confident that we have the right initiatives and strategies in place to enable us to realize our business goals.