The Kenya Power board on Tuesday warned investors that its earnings for the financial year ending June 30, 2020, will be lower than earnings posted at a similar period the previous year.
In a statement, the Kenya Power board noted that the COVID-19 Pandemic has adversely affected the company leading to slow growth in electricity sales and an increase in financing costs resulting in reduced earnings.
“Based on a review of the company’s financial performance, the board of directors has determined that the earnings for the financial year ending June 30, 2020 are projected to be lower than the earnings for the previous year,” the board said in a statement.
“The board and management are focused on enhancing the company’s financial performance through improving operational efficiency, growing sales, reducing system losses and managing costs,” the board further said in its statement.
This comes even as the company’s net earnings for the financial year ended June 30, 2019 took a nosedive to KSh 262 million compared to Ksh3.3 billion posted the previous year.
The power utility firm attributes the tanked earnings to the high cost of purchasing electricity from two hydro-electric plants.
In March, Kenya Power in an attempt to boost its profits announced plans to commercialize its garage and lease out its land.
Kenya Power’s Managing Director Bernard Ngugi said that the company expects the new avenue to diversify revenue streams and support electricity sales.
“We have a transport section and we want to open that as a public garage since it is idle at the moment. We also want to lease out idle land,” said Ngugi.
“The garage sits on huge land and we will liaise with insurers to give us an opportunity to repair vehicles. Going by the growing numbers of vehicles on roads, it is a potential business.” he added.