Kenya Power has posted a half year profit before tax of Ksh. 332 million following a loss before tax of Ksh. 7 billion for the financial year ended June 2020.
The full year performance was largely impacted by the effects of COVID-19 on the operating environment. This, paired with a one off increase in impairment for inventories amounting to Ksh. 3.65 billion.
Due to the pandemic, electricity sales remained largely unchanged at 8,171 GWh for the period under review compared to 8,174 GWh the previous year. Total revenue grew marginally from Ksh. 133.1 million to Ksh. 133.3 million, representing a 0.09% increase.
During the period, the Company also incurred foreign exchange losses of Ksh. 3.53 billion resulting from depreciation of the shilling against the world’s major currencies.
The half-year trading results for the company registered significant improvement compared to the full year posting a profit before tax of Ksh. 332 million.
During the half year period, electricity sales increased to Ksh. 61.49 billion from Ksh. 61.24 billion recorded during a similar period in 2019.
At the same time, net operating expenses reduced by Ksh. 4.3 billion to Ksh. 23.43 billion while finance costs went up by Ksh. 4.22 billion to Ksh. 8.05 billion. This loss has mainly been attributed to unrealized foreign exchange losses occasioned by the depreciation of the shilling against major foreign currencies. This was further occasioned by the negative impacts of the Covid-19 pandemic on the macro-economic environment.
“The pandemic had a primary impact on our sales and revenue collection as companies scaled down operations and customers were unable to meet their bill obligations on time due to suppressed incomes,” said Kenya Power’s Managing Director and CEO, Bernard Ngugi.
Mr. Ngugi added that the situation was aggravated by the company’s inability to exercise strict revenue collection measures on hospitals and water companies. This majorly being critical services providers during the height of the pandemic.
The company has embarked on a turnaround strategy that is aimed at improving the financial and operational aspects of the business. This new strategy involves balancing social responsibilities to enhance business sustainability.