By: IMMACULATE KARAMBU
Kenya Power has posted a 6 per cent increment in net profit to Sh7.43 billion for the year ended June 30.
Net earnings for the previous year stood at Sh6.99 billion.
The utility’s jump in profits was supported by increased electricity sales and a review of the electricity tariff that became effective at the start of December 2013.
“Electricity sales grew by 5 per cent from 6,790 million units the previous year to 7,130 million units in the period under review. This combined with the implementation of the second phase of the tariff calendar period in July 2014 and improved distribution efficiency led to a 24.3 per cent increase in sales revenue,” said Kenya Power in a statement accompanying the results.
During the period under review, the company’s sales rose from Sh62.6 billion in the previous year to Sh77.8 billion.
The cost of purchasing electricity from generating companies, excluding the fuel cost levied on thermal power and foreign exchange losses, increased to Sh44.5 billion from Sh30.7 billion.
The rise was attributed to additional capacity charges by Kenya Electricity Generating Company (KenGen) and independent power producers for new power plants and an increase in the energy charges resulting from growth in the total number of units of electricity purchased during the period.
Transmission and distribution costs increased from Sh22.7 billion incurred during the previous year to Sh24.2 billion while the fuel cost dropped by Sh13.1 billion to Sh25.8 billion, following increased geothermal power consumption.
As a result of increased uptake of loans during the period, Kenya Power incurred higher finance costs related to interest incurred in loans repayment to Sh4.9 billion, up from Sh4 billion.
The company increased interest income by 98.7 per cent to Sh1.4 billion, mainly due to increased bank balances.
“As we move into the future, we will remain focused on strategies that enable us take advantage of emerging opportunities for business growth and sustainability. Our immediate focus will be in system expansion, network upgrade, customer connectivity and loss reduction,” said Kenya Power’s managing director and chief executive officer Ben Chumo.
SOURCE: DAILY NATION