Kenya Power’s finance cost shot up by Ksh 7.6 billion mainly due to unrealized foreign exchange losses on loan revaluations as a result of the depreciation of Kenya Shilling against major foreign currencies.
- •In its half-year period to December 2023 Financial statement, Kenya Power says that foreign currency denominated loans account for 90 per cent of the company’s loan portfolio.
- •The Kenya Shilling strengthened against major international and regional currencies during the week ending February 22.
- •It exchanged at Ksh 144.15 per US dollar on February 22, compared to Ksh 153.20 per US dollar in February 15.
“We hope the positive trend exhibited by Shilling over the past few days continues in the remaining part of the year to ease our forex exposure and enable us finish the year at a stronger financial position,” Kenya Power’s Managing Director Joseph Siror said.
The power utility firm recorded Sh319 million in profit after tax for the half-year period to December 2023, marking an improvement from a loss of Sh1.1 billion recorded during the previous half-year period to December 2022.
The improved profitability was driven by growth in revenue resulting from increased electricity sales as well as the implementation of a cost-effective tariff. During the period under review, revenue from electricity sales grew by 31 per cent to Ksh 113.6 billion.
- •Kenya Power’s operating costs increased by Ksh 1.7 billion during the period under review to Ksh 19.7 billion,
- •The increase was also driven by higher electricity wheeling charges as provided in the cost-effective electricity tariff and increase in depreciation.
- •This is in addition to higher staff costs following of new staff to reinforce field operations and enhance overall operational efficiency to improve service delivery to customers.
New Connections
In the period, the company commenced the deployment of Rapid Results Initiative (RRI) which is meant to fast-track meter installation for new connections across the country as a measure to drive customer connectivity and grow electricity sales.
“I am glad to note that our sales growth was driven by our deliberate effort to grow our customers numbers, having surpassed our connectivity target for the half year period by 13.87 per cent with a total of 225,000 new customers to the grid,” said Kenya Power’s Managing Director Joseph Siror.
Over the sixth-month period under review, there was a 240GWh increase in electricity units purchased and dispatched from renewable energy sources. Following increased uptake of energy from renewable sources, consumption of thermal generation reduced by 93GWh from 650GWh in the similar period in 2022 to 557GWh leading to a Ksh2.05 billion reduction in fuel cost charge on customer bills.
“In the period ahead, we will step up our investments in the network to fortify its reliability, this aligns with our mission of providing affordable, clean, reliable and sustainable power,” added Siror.
Kenya Power launches new strategic plan (kenyanwallstreet.com)