Kenya has recorded a 16 per cent fall in half-year profits to Sh2.46 billion as operating expenses went up in the country’s power company.
The six months ending in December 2018 indicate that the Nairobi Securities Exchange-listed firm’s profit reduced despite total revenue rising 3.4 per cent to Sh69.37 billion.
This was as electricity sales grew by 21.4 per cent to Sh56.96 billion. The profits were pulled down by a four per cent growth in operating expenses to Sh61.7 billion from Sh59.3 billion.
Non-fuel power purchase costs rose by 18.8 per cent to Sh32.6 billion as units purchased grew by nine per cent to 5,324 gigawatt hours (GWh) from 46,931 GWh.
Transmission and distribution costs rose by Sh5.89 billion or 37 per cent to Sh21.7 billion. This was due to costs associated with an expanded network.
However, the State-owned power firm cut fuel costs by 44 per cent to Sh6.88 billion to reflect dividends of reduced reliance on thermal power.
Acting managing director Jared Othieno said the company continues to work on improving its efficiency.
“The company continues to undertake initiatives to improve customer satisfaction, enhance efficiency in business operations and grow our revenue,” he said.
“We are transforming customer experience by improving operations at customer touch points, simplifying processes for efficient service delivery and embedding positive organizational culture.”
The firm remains in negative working capital with current liabilities being 1.9 times higher than the current assets, pointing to pressure in honouring short term obligations. It is also in breach of debt covenants.
Finance costs rose by 23.5 per cent to Sh4.02 billion from Sh3.25 billion reflecting increased borrowing.
Kenya Power’s total debt is Sh115.87 billion. While Sh16.8 billion is repayable in under 12 months, Sh99 billion has maturity period longer than a year.
The board did not recommend any interim dividend against this performance. The case was the same in full year results ended June 2018 when profits hit 10-year low.