Kenya Power has reported a net profit before tax of Ksh. 5.659 billion in the half year trading period ended 31 December, 2021, compared to Ksh. 332 million posted in a similar period the previous year. The growth has been attributed to an increase in sales, enhanced system efficiency, and lower operating costs.
Similarly, electricity sales recorded a 366GWh increase to 4,562GWh, an 8.7% growth compared to a similar period last year. This was driven by an increase in customer connectivity and 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 also decreased from Ksh. 20.132 billion to Ksh. 19.036 billion as a result of enhanced cost management and resource optimization initiatives by the company. Non-fuel power purchase costs also 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. Further, 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. This is mainly due to a rise in unrealized 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 result, the company reduced trade and other payables by over Ksh. 4 Billion. In addition, the business cleared overdrafts amounting to Ksh. 3.595 billion.