Although Kenya Power and Lighting Company (KPLC) plc earned
more revenue from an increase in the customer base, higher costs of financing
the business and purchase of more power for the grid, dampened its financial
performance last year.
Net earnings of state utility firm dropped by a significant 92
per cent from KSh 3.27 billion in June 2018 to KSh 262 million last year.
This is according to its financial results for the year ended 30th June, 2019.
KPLC attributes the decline in its earnings to increase power purchase costs, which rose by KSh 18.1 billion from KSh 52.8 billion to KSh 70.9 billion. Two power plants with a combined generation capacity of 360 MW were commissioned during the period.
Finance costs surged a whopping 47 per cent to Sh10.3 billion from Sh7 billion. The firm states that this was due to the increased usage of short-term borrowings to cover cash flow shortfalls and unrealized foreign exchange loss.
The firm’s gross profit fell to KSh 42.9 billion from KSh 47.3 billion while the size of its balance sheet shrunk from KSh 332 billion to KSh 328 billion during the period under consideration.
Cash generated from operating activities declined to KSh 28.3 billion to KSh 26.6 billion. Revenue from electricity sales grew by KSh 16.9 billion from KSh 95.4 billion in 2018 to KSh 112.4 million at the end of the 2019 financial year.
KPLC attributes this rise in revenue to a tariff review at
the beginning of the year. It was after this review that the firm further
lowered rates for small businesses and broadened those for domestic customers.
The firm recorded growth in electricity sales from 7,905 GWh to 8,174 GWh. Transmission and distribution costs declined from KSh 44.5 billion to KSh 41 billion.