Kenya Power has reported a remarkable turnaround, posting a KSh 30 billion net profit for the financial year ending June 30, 2024, a significant recovery from a KSh 3.19 billion loss the previous year.
The strong performance is attributed to a 21% growth in sales, primarily from commercial and industrial customers, as well as the shilling’s recovery against the US dollar.
Revenue increased to KSh 231 billion from KSh 191 billion, while finance costs fell sharply by KSh 25 billion due to an unrealized foreign exchange gain of KSh 7.9 billion, reversing a previous loss of KSh 16.9 billion.
The board has proposed a dividend of KSh 0.70 per share, marking the end of a prolonged period without dividends for shareholders.
“This gain was due to the appreciation of the Kenyan Shilling against the US Dollar and Euro, both of which represent approximately 90% of our loan portfolio. Power purchase cost increased from Sh143.58 billion the previous year to Sh150.61 billion,” Kenya Power said in a statement.
“This growth was driven by additional units purchased to support rising demand, as well as the high exchange rate earlier in the financial year. While the Company’s revenues are billed entirely in Kenya shillings, power purchase contracts are predominantly denominated in foreign currencies.”
As a result, the strengthening of the Shilling in the second half of the year led to an increase in the cost of sales that was lower than the revenue growth, thus contributing to the higher gross margin.
Kenya Powers said operating expenses rose to Sh46.28 billion, up from Sh37.28 billion in the previous year.
This increase in transmission and distribution expenditure was occasioned by a 92 per cent rise in wheeling charges for the expanding transmission network and the recruitment of additional technical staff to support business operations.
