Kenya Power on Friday reported a net profit of Ksh 3.2 billion for the half-year trading period ended 31 December 2021, compared to KShs 138 million in a similar period in 2020.
It attributed the growth to an increase in electricity sales, enhanced system efficiency, and lower operating costs.
Electricity sales recorded a 366GWh increase to 4,562GWh, an 8.7percent growth compared to a similar period last year.
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 per cent improvement in system efficiency which stood at 77.13 per cent as at 31st December 2021, led to a 12.9 per cent increase in electricity revenue which grew to Shs.69.447 Billion.
Operating costs decreased from KShs 20.132 Billion to KShs 19.036 Billion as a result of enhanced cost management and resource optimization initiatives that the Company is implementing as part of its turnaround strategy.
Non-fuel power purchase costs increased from KShs 38.123 Billion incurred in the previous period to KShs 40.487 Billion mainly due to additional unit purchases to support increased demand.
Similarly, fuel costs increased from KShs 4.618 Billion to KShs 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 in 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 Shs.4 Billion. In addition, the business cleared overdrafts amounting to Shs.3.595 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 the Government for the Last Mile, and street lighting programs, as well as funds for scheduled loan repayments.