Increased sales bolster Kenya Power’s annual pre-tax profits

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Kenya Power’s pre-tax profits for the financial year July 2014 to June 2015 rose to Shs.12.254 billion shillings from Shs.11.016 billion recorded during the previous fiscal period.

The company’s Managing Director and Chief Executive Officer, Dr. Ben Chumo, said that growth in the annual trading results was due to increased sales as a result of improved power supply and increase connectivity buoyed by tariff increase effected from December 1st 2013.

“Our electricity sales grew by 5% to 7,130 million units from 6,790 million units recorded in the previous review period,” said Dr. Chumo.

He said power purchase costs (excluding fuel and foreign exchange costs) increased from Shs.30.659 billion to Shs.44.46 billion due to additional capacity charges by Kenya Electricity Generating Company (KenGen) and Independent Power Producers for new power plants. The firm’s power purchase units increased by 4.5% to 8,629 GWh from 8,254 GWh.

“The increased usage of geothermal energy resulted in a 33.7% drop in the fuel cost charge from Shs.13.138 billion to Shs.25.835 billion. This drop was due to the addition of two additional plants which became operational in the period under review,” he added.

Dr. Chumo said the Company has mobilized resources to accelerate focused implementation of network upgrade projects including fixing the existing network and the completion of the ongoing substation projects across the country.

“This capital intensive work resulted in an increase in expense costs to Shs24.217 billion from Shs.22.749 billion incurred the previous period. The implementation of power system upgrade and expansion projects to improve the quality of service to customers is in line with growth of the business in general,” he added.

As a result of the performance, the Directors of the Company have proposed a dividend of Shs.0.50 for each ordinary share payable on 29th February 2016.

“Our immediate focus will be on four priority areas which will enable us to take advantage of emerging opportunities for business growth and sustainability. These are system expansion, network upgrade, customer connectivity, and loss reduction. These strategies will not only further grow our business but will also increase shareholder value,” Dr. Chumo concluded.

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