What you need to know:
- Despite this, the utility still more than doubled its profit after tax from Sh1.5 billion to Sh3.5 billion.
- This is the second financial year in a row in, which Kenya Power is recording a profit after moving from loss-making territory in 2021.
- The firm said Kenya’s deteriorating currency had a huge impact both on its finance costs and profit before tax.
Expensive electricity and a weak shilling caused a Sh18.9 billion dent in Kenya Power’s books, blighting an otherwise good run that saw it triple its after-tax profits for the fiscal year that ended in June.
Kenya Power’s financials released yesterday showed that its fuel costs went up by Sh15.3 billion in the year to June 2022 compared to the previous period on nearly double uptake of costly thermal power due to rain failure and interruptions in supplies of the cheaper geothermal.
Fuel power purchase costs increased from Sh11,184 million to Sh26,488 million because of the increased dispatch of electricity from thermal energy plants from 876 Gigawatt hours (GWh) to 1,539.
“This increase in a dispatch from thermal plants was due to inadequate electricity generation from hydro sources owing to failed rains, unavailability of key geothermal plants, the interruption of the Loiyangalani-Suswa transmission power line, and an increase in fuel prices globally during the year,” Kenya Power said.
Despite this, the utility still more than doubled its profit after tax from Sh1.5 billion to Sh3.5 billion.
This is the second financial year in a row in, which Kenya Power is recording a profit after moving from loss-making territory in 2021.
The firm said Kenya’s deteriorating currency had a huge impact both on its finance costs and profit before tax, further draining the gains it would have made after sealing some of the leakages causing inefficiencies.
“Basic electricity revenue (excluding foreign exchange surcharge and fuel recovery) recorded a decline of 0.27 per cent from Sh125,927 million the previous period to Sh125,584 million. This, and a 40.2 per cent increase in finance costs due to the depreciation of the Kenya shilling against major world currencies, resulted in a 37.5 per cent decline in profit before tax compared to the previous trading period,” the company stated.
The firm’s finance costs rose from Sh9 billion to Sh12.7 billion “attributable to the depreciation of the Kenya Shilling against major world currencies.”
Kenya Power also reported that its non-fuel costs rose by Sh3.5 billion to Sh79.6 billion, due to increased energy uptake from new generation plants during the period.
The firm’s total cost of sales rose by 22.3 per cent to Sh115.2 billion, while sales went up by 6.9 per cent.
Kenya Power attributes the improved sales to the improvement of its system efficiencies in sealing leakages through which energy has been stolen in the past, indicating that it will continue deploying smart meters across the country this year.