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By Eunice WAWUDA
Utility firm, Kenya Power has posted a Sh30 billion net profit in the year ended June 30, 2024 from a Sh3.19 billion loss the previous year.
The NSE -listed power distributor has attributed the much-improved results on a 21 per cent increase in sales from commercial and industrial customers and the strengthening of the shilling against the US dollar during the period under review.
The firm’s sales rose to Sh231 billion from Sh191 billion while finance costs dropped by a massive Sh25 billion.
During the year, electricity sales increased by 21% to KShs.231.12 billion from KShs.190.98 billion recorded during the previous trading year.
This growth is attributable 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.
Commercial and Industrial, as well as Domestic customer categories, recorded the highest growth in sales at 5.1% and 5.5%, respectively.
Finance costs decreased by KShs.24.84 billion, primarily driven by unrealised foreign exchange gain of KShs.7.88 billion, compared to a loss KShs.16.87 billion in the previous period resulting from loan revaluations.
This gain was due to the appreciation of the Kenyan Shilling against the US Dollar and Euro, both of which represent approximately 90% of the Company’s loan portfolio.
The power purchase cost increased from KShs.143.58 billion the previous year to KShs.150.61 billion. This growth was driven by additional units purchased to support rising demand, as well as the high exchange rate that prevailed earlier in the financial year.
“While the Company’s revenues are denominated entirely in Kenya shillings, power purchases are predominantly paid in foreign currencies. As a result, the strengthening of the Shilling in the second half of the year led to an increase in cost of sales that was lower than the growth in revenue, thus contributing to the higher gross margin.” said Kenya Power’s Managing Director and CEO Dr. (Eng.) Joseph Siror.
Similarly, the operating expenses rose to KShs.46.28 billion from KShs.37.28 billion in the previous year.
“This increase is attributed to a 92% rise in wheeling charges for the expanding transmission network and the recruitment of additional technical staff to support business operations. Through careful cost management and zero-based budgeting, we aim to maintain stable margins despite inflationary pressures,” said Dr. (Eng.) Siror.