This archive report was first published on 16 June 2020.
Kenya Power and Lighting Company (KPLC) has become the first Kenyan company to issue a profit warning for the third year in a row, a trend that has raised concerns about the company's financial health.
According to a statement by Imelda Bore, the company's performance has been affected by the COVID-19 pandemic, which has led to a slow growth in electricity sales and an increase in financing costs.
The pandemic has forced many heavy manufacturers to close their shops, resulting in a significant decline in power sales. These manufacturers account for more power sales than households, making the decline in sales even more pronounced.
As a result, KPLC's earnings are expected to be lower than in 2019, a trend that has been observed for the past two years. In 2019, the company had blamed the ever-rising non-fuel costs for digging into its incomes.
Kenya Power shareholders will miss out on dividends for the second year in a row due to the massive profit drop. The company's financial performance has been marred by higher costs, which have led to a 63.7 percent decline in net profit to Sh1.92 billion in the financial year ended June 2018.
