Kenya Power has issued a profit caution, warning that the company’s earnings will be lower than last years’ because of low growth in electricity sales.
A statement from the board secretary reveals that this is as a result of interruptions in operations by the coronavirus pandemic, causing slow growth in electricity sales. The company issued a profit warning in 2019, cautioning that rising non-fuel costs will trim its incomes.
“The COVID-19 Pandemic has adversely affected our business operations leading to slow growth in electricity sales, and an increase in financing costs, resulting in reduced earnings,” read a statement from Imelda Bore.
The slow growth in electricity comes in the light of reduced activity by manufacturers, who account for more power sales than households. The pandemic reduced activity in the manufacturing sector, forcing 42% of manufacturers to operate below half their production capacity.
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The company’s income took a 92% nosedive to KSh262 million for the year ended 30th June 2019, from KSh3.3 billion in 2018. Then, the company attributed the shrunk incomes to the high cost of purchasing electricity from two recently commissioned plants.
READ ALSO: Kenya Power Net Earnings Dip 92% to KSh 262 Million
