Kenya Power is projecting a pre-tax loss of Sh5.55 billion for the financial year ending June 2023, in what will mark the worst performance for the utility in seven years.
Treasury disclosures to the International Monetary Fund (IMF) show the utility firm, which in May issued a profit warning, will see the pre-tax earnings plunge from the Sh5.12 billion before tax profit it had posted in the previous financial year.
At Sh5.55 billion pre-tax loss, Kenya Power will have posted the worst results since that of the financial year ended June 2017 when it closed with Sh6.04 billion loss before tax.
Kenya Power projects its net revenue to grow by 11 percent to Sh174.98 billion but a surge in expenses is set to push it into the loss position.
The utility firm estimates that operating expenses will rise from Sh38 billion to Sh42.6 billion while financial expenses will grow by a third to Sh16.4 billion from Sh12.3 billion, piling pressure on its bottom-line.
Kenya Power, however, expects to recover from the loss position and post a pre-tax profit of Sh10.56 billion in the financial year ending June 2024 and rise to Sh12.03 billion in the following financial year.
The firm in May attributed the expected profit slump to Kenyan shilling fall against major currencies, which has sharply raised its obligations. Its net profit was Sh3.5 billion in the year ended June 2022.
About 90 percent of the company's loan book is denominated in foreign currency, which has placed a greater strain on its coffers, while about 60 percent of its power purchases are also in foreign currency.
The National Treasury has told the IMF that it expects Kenya Power recovery, supported by the upward review of tariffs and restructuring of operations, to cut the utility firm’s dependence on exchequer support.
