Kenya Power half-year profit drops 30.3pc as debt financing costs rise

A Kenya Power worker inspects a power line. FILE PHOTO | NMG
A Kenya Power worker inspects a power line. FILE PHOTO | NMG 

Kenya Power’s net profit for the six months ended December 2017 dropped by 30.3 per cent to Sh2.93 billion, as the high cost of financing debt took a toll amid lethargic power consumption growth in a slowing economy.

Financing costs rose by 42.7 per cent or Sh976 million to hit Sh3.3 billion in the period pulling down profits even as the total revenue grew by 14.8 per cent to Sh67.1 billion.

“The decrease (in profit) was attributed to the general slowdown of the economy and an increase in financing costs…which rose during the period under review compared to the previous year as a result of utilisation of short term facilities,” said Kenya Power in a statement.

No interim dividend

The firm will not be paying an interim dividend for the period.

The State-owned power distributor has said that its electricity sales grew by 2.3 per cent from 3,805 Gigawatt Hours (GWh) to 3,893 GWh in the period, which in turn saw sales revenue rise by 2.5 per cent to Sh46.93 billion.

Meanwhile, total operating costs went up by 17.4 per cent to Sh59.3 billion, mainly due to higher fuel costs — which doubled to Sh12.3 billion — as drought pushed the country to use more thermal power.

The company now says it will bank on increased power consumption from industrial customers under the discounted night-time tariff plan to grow its revenue in the second half of the financial year.