Companies

Kenya Power half year results down 72pc to Sh693 million

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A Kenya Power technician working on a transmission line. FILE PHOTO | NMG

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Summary

  • Kenya Power profits for six months to December 2019 fell 71.8 percent to Sh693 million, continuing the trend of dimming performance in the recent years.
  • The results come on the back of a 92 percent plunge in net profit to Sh262 million in the financial year ended June 2019.
  • Revenue during the six months was up six percent to Sh73.4 billion but operating costs rose by 12.4 percent or Sh7.56 billion to pull down the net profits from Sh2.45 billion posted in half year of 2018.

Kenya Power profits for six months to December 2019 fell 71.8 percent to Sh693 million, continuing the trend of dimming performance in the recent years.

The results come on the back of a 92 percent plunge in net profit to Sh262 million in the financial year ended June 2019.

Revenue during the six months was up six percent to Sh73.4 billion but operating costs rose by 12.4 percent or Sh7.56 billion to pull down the net profits from Sh2.45 billion posted in half year of 2018.

Power purchase costs, classified as non-fuel costs, went up from Sh32.5 billion to Sh37.19 billion. Units of power purchased rose from 5,324 gigawatt hours (GWh) to 5,477 GWh.

“This is attributed to additional energy charges from new power plants developed to enhance generation capacity and meet future demand as the country’s electricity access increases,” said the utility firm on Friday.

Kenya Powers share hit a 17-year low on Thursday after the board revealed full year profits had dropped by 92 percent to Sh262 million in the financial year ended June 2019 - the worst performance in 16 years.

The board said profitability was weighed down by a rise in non-fuel power purchase costs and increased burden of servicing loans, even as it failed to issue dividends for the second year running.

Equities research analyst at Genghis Capital Patrick Mumu said shareholders are pricing in the results leading to the decline in price.

“This is a reaction to the unaudited results released to the investors. But investors are likely to wait for the audited version to make clear judgment given there was for instance a restatement of 2018 results,” said Mr Mumu.

Lack of dividends for the second year running in a period of sustained falling share price at the Nairobi Securities Exchange means shareholders cannot enjoy capital gains.

The share has shed 44.62 percent in the last 12 months meaning that investors who offload the share now stand to suffer a similar margin of loss.

Top individual owners Naran Khimji and Virji Khimji Hiran with 8,294,964 shares or 0.425 percent have lost Sh16.65 million during this period.

Those who bought the share a decade ago when it was averaging Sh12.89 will suffer a loss of Sh10.40 per share sold now.