Kenya Power #ticker:KPLC electricity sales grew at the slowest pace in three years to 8,872.8 Gigawatt hours (Gwh) in 2019, offering a weak outlook for the power monopoly that expects to post more than decade-low earnings.
Leading economic indicators from Kenya National Bureau of Statistics show the unit sales grew by 2.3 percent to 8672.78 Gwh compared to the year ended December 2018.
The slowed growth marked the fourth straight year of single digit percentage increase in sales for Kenya Power. A slower growth in a period of static power tariffs ordinarily means that revenue growth with also slow.
From an 11.6 percent jump in 2015, growth in electricity sales slowed to 0.94 percent in 2016, followed by a 7.86 increase the subsequent year. The pace then slowed to 2.96 percent in 2018.
In the year to June 2019, which coincides with the utility firm’s financial year, sales were up 3.7 percent to 8,798 Gwh. The results for this period are not yet available given the absence of the Auditor-General.
However, the State-owned power distributor issued a profit warning last year saying it expects a more than 25 percent decline in its net profits, weighed down by rising costs.
This marks the second straight year it has issued such an alert that will now take its earnings to at most Sh1.44 billion, being the lowest in more than 12 years.
The utility firm tied the expected earnings decline to costs related to electricity generation from renewable energy as alternatives to thermal power.
Net profits for half year ended December 2018 slid by 16 percent to Sh2.46 billion as operating expenses went up. This was despite total revenue rising 3.4 percent to Sh69.37 billion.