Kenya Power records Sh5 billion profit before tax

Kenya Power has reported a profit before tax of Sh5.12 billion

Kenya Power Managing Director (Ag.), Eng. Geoffrey Muli (seated right) and Ethiopian Electric Power CEO, Eng. Ashebir Balcha (seated left), during the PPA signing at Stima Plaza.

Kenya Power has reported a profit before tax of Sh5.12 billion for the financial year ended June 30, 2022.

According to a statement from Kenya Power, the growth was mainly driven by a 6.9% increase in sales and a notable improvement of 1.5% in system efficiency to 77.57%.

This performance was enhanced by a 4.6% reduction in operating costs based on the continued deployment of strategic cost management initiatives.

Basic revenue registered a slight decline from Sh125.9 billion to Sh125.6 billion.

This, together with a 40.2% increment in finance costs, attributed to the depreciation of the Kenya Shilling against major world currencies, resulted in a 37.5% decline in Profit before Tax compared to the previous trading period.

"Our focus for this financial year set on building on the momentum built during the previous financial years when the turn-around strategy was rolled out. Despite some curve balls, all our core business lines have registered remarkable improvement,” said Kenya Power Managing Director Eng. Geoffrey Muli.

Sales grew by 6.9% to 9,163 GWh partly due to the addition of 453,916 customers, mainly in the SME and large power segments, moving the total number of customers to 8.9 million.

Sales growth was also driven by increased usage amongst existing customers, a hallmark of the strides the economy is making to recover from the effects of the pandemic.

Operating expenses were reduced by 4.6% from Sh39.861 billion to Sh38.026 billion mainly due to effective cost management and rigorous resource optimization initiatives implemented during the year.

The company's net liability position improved by Sh10.7 billion to Sh55.74 billion mainly

as a consequence of a reduction in overdue debt, and the clearance of a Sh3.6 billion overdraft.

Power purchase costs rose by 22.3%. Non-fuel costs went up by 4.75 % from Sh.76.037 billion to Sh79.65 billion, resulting from increased energy uptake from new generation plants during the period.

Fuel costs increased from Sh11.18 billion to Sh26.49 billion because of the increased dispatch of thermal energy plants from 876 GWh to 1,539 GWh.

This was attributable to low hydro-electric energy, unavailability of key geothermal plants, the interruption of the Loyangalani - Suswa transmission power line, and an increase in fuel prices globally.

Profit after tax increased to Sh3.50 billion from Sh1.49 billion after the tax expense for the the year under review was reduced from Sh6.71 billion to Sh1.62 billion.

The corporate tax rate reverted to 30% from 25% in 2021, hence the significant movement in the comparative tax expense.

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