Kenya Power has reported a 92% decrease in profits tanking to Ksh2.27 billion for the financial year ended June 2019 on the high cost of buying electricity.
Although, the company’s revenue rose by 1.3% to Ksh133 billion the company’s profitability streak also took a beating from higher costs of operations as well as high costs of adding more power to the national grid.
“The decreased profits are mainly attributable to increase in non-fuel power purchase costs by Ksh18 billion from Ksh52.7 billion to Ksh70.8 billion following the commissioning of two power plants with a combined generation capacity of 360MW during the period,” said Kenya Power.
Compounding on the electricity transmitter and distributor tough position were finance costs which jumped 47% to Ksh10.3 billion from Ksh7 billion on what the company attributed to an uptick in usage of short-term loans to cover cash flow deficits and forex losses.
Gross profit fell to Ksh 42.9 billion from Ksh47.3 billion while income generated from operational activities stood at Ksh26.6 billion down from Ksh28.3 billion the previous year.
The power company, however, reported a 17.8% revenue growth by Ksh16.9 billion from Ksh95.4 billion to Ksh112.429 billion during the period under review.
The rise is attributed to tariff reviews and increase unit sales owing to an expanding customer base.
Transmission and distribution costs dropped by 7.8% from 44.5 billion to Ksh41 billion.