This archive report was first published on 19 September 2019.
Kenya Power has announced a projected decline in its net earnings for the financial year ended June 30, 2019, with a drop of more than 25% compared to the previous year.
According to a public notice issued by the company on Thursday, the decline in profits is attributed to an increase in non-fuel costs, which aligns with the company's strategy of growing cheaper and cleaner renewable energy.
Despite growing operational revenues and electricity sales, inefficiencies continue to plague the monopoly, putting pressure on its bottom line.
Kenya Power had previously issued a profit warning in 2018, which was followed by a 64% dip in earnings to Ksh.1.9 billion in the 2017 financial year, despite a 4.2% increase in revenues to Ksh.125.8 billion.
The company's costs for power purchases surged to Ksh.52.3 billion, largely due to an extension of its network reach, while the firm's reliance on borrowed funds has further strained its finances.
Kenya Power has, however, launched an energy loss reduction programme aimed at trimming its commercial losses in transmission to less than 15% and meeting global operating benchmarks.
