This archive report was first published on 19 September 2019.
Kenya Power, the state-owned utility company, has posted a decline in profits for the second year in succession, with net earnings expected to drop by at least 25% compared to the previous year.
According to a profit warning issued by the company, the net profit for the year ending June 2019 is expected to be at least Sh1.44 billion, down from the Sh1.92 billion after-tax profit posted in the financial year ended June 2018.
The company's Acting Managing Director, Jared Othieno, attributed the decline in profits to an increase in non-fuel costs related to the company's strategy to grow renewable energy, which he said will pay dividends in the future by providing cleaner and cheaper power.
"The drop in profits is attributed to among others, an increase in non-fuel costs in line with the company's long-term strategy to grow cheaper and cleaner renewable energy," Othieno said in a public notice.
Despite the decline in profits, the company's revenue for 2019 has improved compared to last year, with electricity revenues substantially increasing as indicated in the half-year results.
Kenya Power had issued a similar warning last year, which saw the company's profits drop by up to 63.7% from the Sh5.3 billion posted in 2017, resulting in technical insolvency as at June 2018.
