Kenya Power #ticker:KPLC share price hit a 17-year low a day after the company revealed its profits had dropped to its lowest level since 2003.
The share Thursday dipped 6.4 percent at the Nairobi bourse to Sh2.49, the lowest level since May, 2003, when it was in losses.
The utility firm on Wednesday announced a 92 percent plunge in profit to Sh262 million in the financial year ended June 2019 — the worst performance in 16 years.
Analysts reckon the profits fall and the Kenya Power dividend performance has influenced the performance of the share at the NSE on thin trading.
“This is a reaction to the unaudited results released to the investors. But investors are likely to wait for the audited version to make clear judgment given there was for instance a restatement of 2018 results,” said Patrick Mumu, equities research analyst at Genghis Capital.
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 Wednesday were not audited.
The firm also last paid a dividend in 2017, further dimming its performance at the Nairobi bourse.
The cost of buying electricity from power generators like KenGen #ticker:KEGN jumped by Sh18 billion during the period, Kenya Power said, blunting the impact of an increase in sales to customers.
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 360MW during the period,” said Kenya Power.
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.