Kenya Power has reported its worst profit in 16 years, turning the spotlight on the push by the utility firm to raise retail tariffs for homes and businesses.
The firm’s net profit plunged 92 percent from Sh3.26 billion to Sh262 million in the year to June — the lowest profit since it returned to profitability in 2004 after posting Sh2.89 billion loss the previous year.
The cost of buying electricity from power generators like KenGen jumped by Sh18 billion during the period, Kenya Power said, blunting the impact of an increase in sales to customers.
Kenya Power has made an application to the regulator for an increase in electricity prices by up to a fifth, saying it is key in reversing its reducing profitability — which has seen its earnings drop for three years in a row.
Finance costs also went up 46.4 percent to Sh10.3 billion due to higher short-term borrowings, the company said.
“This was mainly attributable to increase in non-fuel power purchase costs by Sh18 billion from Sh52.7 billion to Sh70.8 billion following the commissioning of two power plants with a combined generation capacity of 360 megawatts (MW) during the period,” said Kenya Power.
The shock results saw the firm’s share at the Nairobi Securities Exchange shed 5.3 percent to close trading at Sh2.52 — a level last seen more than a decade ago. The utility firm also last paid a dividend in 2017.
The company, the main electricity distributor in Kenya, delayed publication of its results last November due to a vacancy at the Auditor -General’s office, which is responsible for auditing State-controlled firms.
The search for the Auditor-General has been delayed after the initial interviews flopped. The results issued yesterday were not audited.
Executives at Kenya Power look set to use the results to pile pressure on the Energy and Petroleum Regulatory Authority (EPRA) — the electricity sector regulator — for higher tariffs.
Kenya Power wants to increase the consumption charge for those consuming less than 100 kilowatts per month to Sh12.50 a unit, up from the current Sh10.
In August 2018, EPRA reduced the retail prices of electricity after an order from President Uhuru Kenyatta in the wake of widespread complaints from domestic customers and small businesses over a costly tariff introduced last July.