Kenya Power has reported a net profit of Sh319 million for the six months ending December 2023, a significant turnaround from the Sh1.15 billion net loss posted in the same period the previous year.
The utility firm’s unaudited results, released on Friday, highlight increased electricity sales and a tariff review as key factors contributing to its improved financial performance.
Revenue from electricity sales surged by 31.3 percent, rising from Sh86.67 billion to Sh113.55 billion. During this period, Kenya Power connected 225,000 new customers to the grid, exceeding its target by 13.87 percent.
The company attributed its enhanced profitability to the revenue boost from higher electricity sales, a more cost-reflective tariff review in April 2023, and a growth in unit sales by 129GWh.
In April of the previous year, Kenya Power implemented changes, including increasing the base consumption charge to Sh12.22 per unit for lifeline consumers (using no more than 30 units a month), up from Sh10.
The lifeline threshold was also revised to 100 units. Household tariffs for consumers with monthly consumption between 31kWh and 100kWh saw a 19 percent increase to Sh26.10 and Sh26.22, respectively.
The increased revenue led to a 2.6 times rise in Kenya Power’s operating profit, reaching Sh14.45 billion from Sh5.65 billion, despite a 9.4 percent increase in operating costs to Sh19.7 billion.
The rise in operating costs was attributed to higher wheeling charges and increased staff costs, as the company hired additional personnel to reinforce field operations, enhance operational efficiency, and improve customer service.
However, the doubling of finance costs from Sh7.39 billion to Sh15 billion slowed down the overall earnings growth. Kenya Power explained that the increased finance costs were due to rising unrealized foreign exchange losses on loan revaluations, as the local currency depreciated against major foreign currencies.
