Kenya Power has reported a pre-tax profit of KSh 5.659 Billion in the half year trading period ended 31 December 2021, compared to KSh 332 Million realized in a similar period in 2020.
This growth is mainly attributable to an increase in sales, enhanced system efficiency, and lower operating costs.
Electricity sales recorded a 366GWh increase to 4,562GWh, an 8.7% growth compared to a similar period in 2020.
This was driven by an increase in customer connectivity, as well as improved supply quality and reliability due to enhanced preventive maintenance works, network refurbishment, and accelerated faulty meter replacements.
This, combined with a 2.33% improvement in system efficiency which stood at 77.13% as at 31st December 2021, led to a 12.9% increase in electricity revenue which grew to KSh 69.447 Billion.
Operating costs of Ke decreased from KSh.20.132 Billion to KSh 19.036 Billion as a result of enhanced cost management and resource optimization initiatives that the Company is implementing as part of its turn-around strategy.
Non-fuel power purchase costs increased from KSh 38.123 Billion incurred in the previous period to KSh 40.487 Billion mainly due to additional unit purchases to support increased demand.
Similarly, fuel costs increased from KSh.4.618 Billion to KSh 10.871 Billion mainly due to a 314 GWh increase in units purchased from thermal plants to 709 GWh due to low hydrology resulting from delayed rains, and an upsurge in fuel prices.
Finance costs increased to KSh.6.777 Billion from KSh.6.601 Billion the previous period mainly due to a rise in unrealised foreign exchange loss resulting from the depreciation of the Kenya shilling against major currencies.
Overdue customer debt, for the first time in five years, recorded a reduction of KSh 900 Million as a result of enhanced field presence, continued government intervention with state agencies, and increased customer engagements.
In the second half of the year, the business will primarily focus on domestic and SME customers who currently account for 67% of the Company’s outstanding debt.
Kenya Power continues to roll out a proactive strategy to enhance its cash position which is premised on the prioritization of payments of outstanding obligations.
As a consequence, the Company reduced trade and other payables by over KSh 4 Billion. In addition, the business cleared overdrafts amounting to KSh3.595 Billion.
Further to this, the Company closed the first half of the financial year with a cash position of KSh 8.347 Billion which includes ring-fenced funds projects, receipts from Government for the Last Mile, and street lighting programmes, as well as funds for scheduled loan repayments.
To build on the gains made on the turn-around strategy, which was launched in the last financial year, the business will in the second half, escalate initiatives aimed at growing sales, revenue collection, enhancing system efficiency, manage costs and importantly, improve customer experience.
In particular, Kenya Power is focusing on reducing billing complaints by improving the entire billing value chain.
The Kenya Power owns and operates most of the electricity transmission and distribution system in the country and sold electricity to over 8.5 million customers as at February 2022.
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