Listed utility company Kenya Power & Lighting Company Plc (KPLC) profit plunged 91% for the financial year ended June 30, 2019.
According to its audited results, Kenya Power reported a net profit of KSh262 million compared to KSh3.3 billion the previous year.
The company said it attributed the loss to increased non-fuel power purchase costs which rose by KSh18.1 billion to KSh70.9 billion, from KSh52.8 billion in a similar period in 2018. In addition to the commissioning of two power plants with a combined generation capacity of 360MW.
“In addition, finance costs rose by KSh3.2 billion due to increased levels of short-term borrowing and foreign exchange losses,” the firm said in the financial results as signed by company secretary Imelda Bore.
According to the results, its revenue from electricity sales grew by KSh16.9 billion from KSh95.4 billion to KSh112.4 billion attributed to a tariff review at the beginning of the year prior to the subsequent tariff harmonisation that lowered rates for Small commercial customers and broadened life-line tariff for domestic customers.
“The growth in revenue was also supported by a 3.4 percent increase in unit sales from 7,905 GWh to 8,174 GWh owing to an expanding customer base.”
The directors did not recommend the payment of a dividend to shareholders.
“Kenya Power will continue to implement the ongoing business turnaround strategy to improve operational efficiency and ensure financial sustainability,” the statement further said.
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“Keen for investors is that the statement does not indicate the auditor’s opinion on the financial results. In FY18, the auditor qualified the financial results highlighting the incorrect recognition of unbilled fuel costs as revenue, breach of borrowing covenants and material misstatement of provisions for impairment loss on electricity and other receivables.
It will be interesting to sight the auditor’s opinion given that the prior two financial year’s financial results (FY18 and FY17) have been restated likely to address the auditor’s concerns,” commentary from Genghis Capital Analysts.
