Kenya Power to release full-year earnings tomorrow

Kenya Power is expected to announce a return to profitability tomorrow when it releases its financial results for the year to June 2024.

The utility, which is listed on the Nairobi Securities Exchange (NSE), will announce its financial earnings tomorrow morning in a function that will be held at the Sarova Stanley Hotel in Nairobi.

Kenya Power bounced back from a net loss of Ksh1.14 billion in the half-year period to December 2022 to post a profit after tax of Ksh319 million in the half-year ended December 2023.

The positive half-year performance is expected to lift the company’s full-year earnings back to profitability. The utility recorded a net loss of Ksh3.2 billion in the financial year ended June 2023 driven by a weak shilling which inflated its debt repayment costs.

The performance for the FY2023/24 is expected to be underpinned by increased revenues from a record-setting year in terms of electricity demand, while the effects of a strong local currency in the second half are expected to offset the effects of a weak currency during the first half of the fiscal year.

In the first half of the year ended December 2023, Kenya Power’s revenue from electricity sales increased by 31% from Ksh86.67 billion to
Ksh113.56 billion.

Non-fuel power purchase costs increased by Ksh9.79 billion in comparison to the preceding similar period.

“This increase is attributed to the depreciation of the Kenyan shilling against major global currencies, in which the Power Purchase Agreements (PPAs) are denominatedm,” said the utility when it released the results in February.

Operating costs increased by Ksh1.72 billion, from Ksh18.01 billion to Ksh19.73 billion primarily due to higher wheeling charges as enhanced in
the tariff review, increase in depreciation and higher staff costs as a result of onboarding additional resources to reinforce our field operations, enhance overall operational efficiency, and improve service to customers.

The question of a dividend is likely to come up from its shareholders tomorrow, with the firm having gone for years without paying a dividend to its shareholders. The government of Kenya holds a majority stake of 50.1% in te utility, while 49.9% is owned by local and foreign investors.

The dividend drought comes at a time when the company has pledged to allocate 1% of its net profits annually to its newly-launched foundation.

Kenya Power will use the foundation to undertake its environmental and social programes.

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