Kenya Power records Ksh1 billion half-year loss
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Kenya Power records a Ksh1 billion half-year loss owing to a 15 percent power tariff implemented by the previous administration
Kenya Power records a Ksh1 billion half-year loss owing to a 15 percent power tariff implemented by the previous administration.
Owing to a 15% reduction in power prices that was enacted in January of last year and a depreciating shilling, Kenya Power has suffered a net loss of Sh1.14 billion for the six-month period ending in December 2022.
This is a sharp drop from the Sh3.8 billion net profit recorded during the same period in 2021.
“This drop is attributable to increased foreign exchange losses and the implementation of the 15 percent reduction of the end user electricity tariff as recommended by the government in January 2022,” said Kenya Power in a statement on Monday.
The utility company’s costs were dramatically raised as a result of the price decrease, which was intended to lower the price of energy, and a weak shilling, which caused it to enter the red for the first time since 2020.
To reduce the cost of living, former president Uhuru Kenyatta introduced the tariff reduction in January of last year.
Despite an increase in sales, Kenya Power’s basic electricity revenue for the six-month period decreased by Sh6.69 billion due to the 15% fall in power pricing.
Kenya Power recorded a 4.4 percent growth in electricity sales during the period to 4,764 gigawatt-hours (GWh) attributed to growing demand occasioned by increased economic activities and an expanded customer base.
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The weakening shilling has also increased its costs of repaying its debts as well as payments of power supplies from power producers.
This saw its operating costs rise to Sh21.72 billion from Sh19 billion in the six months to December 2021 while fuel costs rose to Sh15.08 billion from Sh10.87 billion owing to higher fuel prices during the period.
Kenya Power’s management, however, maintains a positive outlook for the second half of the year and has earmarked growth of sales to return it to a profit-making position.
“The company projects to improve its business performance in the second half of the financial year by retaining the unwavering focus on increasing electricity sales, enhancing system efficiency, and prudently managing its resources,” said the company.
The company had sunk into a net loss of Sh2.98 billion in the full financial year that ended June 2020, which was its first net loss in 17 years but had since wriggled its way back into profitability.
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