The Cabinet has ordered a split of Kenya’s electricity transmission system to ensure that a power failure in one part does not affect the whole country. FILE PHOTO | NMG
Kenya Power’s share price fell 5.03 percent in Tuesday’s trading when it was the top loser, with investors reacting to the company’s loss announced late on Monday.
The electricity distributor’s stock closed at Sh1.51 on Tuesday, declining from Sh1.59 in the prior trading session.
This represents a market capitalisation loss of Sh156 million. The company is valued at Sh2.94 billion.
Kenya Power posted a Sh1.1 billion net loss for the half-year that ended in December, blamed on the weak shilling and the 15 percent tariff cut that was implemented in January last year as a State directive.
Financial results showed the performance dipped from the Sh3.82 billion net profit that had been posted in the preceding similar period.
“This drop is attributable to increased foreign exchange losses, and the implementation of the 15 percent reduction of the end user electricity tariff as recommended by the government in January 2022,” said Kenya Power.
The utility firm said the tariff reduction saw the basic electricity revenue drop by Sh6.69 billion, highlighting the price it paid to deliver discounted tariffs to consumers.
Kenya Power’s full-year earnings look set to be depressed given that the subsidy on electricity tariffs was in place up to December before it was ended on the recommendation of the International Monetary Fund.
Operating costs increased from Sh19.1 billion to Sh21.7 billion, with Kenya Power linking this to increased foreign exchange losses arising from the revaluation of outstanding payments to power generators denominated in foreign currencies as a result of the depreciation of the Kenya Shilling.
The Kenya shilling has been weakening against the dollar, moving from an average of Sh117.96 units at the start of July last year to close December at 123.37 units.
The local currency is now averaging 126.6 units to the dollar.
Safaricom was among the gainers on Tuesday. The telco’s share price rose 1.3 percent to Sh23.3 after announcing an interim dividend of Sh0.58 per share or a total of Sh23.42 billion.
The dividend will be paid on March 31 to shareholders who will be on record as of March 15.
