• The firm's profit before tax stood at Sh8.2 billion for the period under review.
• This represents a 216% YoY growth compared to a loss before tax of Sh7.04 billion.
Image: FILE
Electricity distributor Kenya Power has bounced back to profitability, reporting Sh1.5 billion in net earnings for the year ended June 30 compared to a Sh939 million loss last year.
The firm's profit before tax stood at Sh8.2 billion for the period under review, representing a 216% YoY growth compared to a loss before tax of Sh7.04 billion.
The power provider has attributed the strong performance to growth in sales and revenue, as well as a double digit reduction in costs and expenses.
Unit sales for the year under review recorded a five per cent growth from 8,171 GWh to 8,571 GWh which was mainly driven by 716,206 new customer connections who contributed an additional 400 GWh, and a rebound of the economy from the effects of the Covid-19 pandemic.
All customer segments recorded growth, with commercial and industrial growing by 4.8 per cent, small commercial by 5.1 per cent, domestic customers by 4.9 per cent and Street-lighting by 10.2 per cent.
Revenue recorded an 8.2 per cent jump from Sh133.3 billion the previous year to Sh144.1 billion, mainly due to an expanded customer base, and heightened revenue protection activities driven by increased field presence.
Kenya Power chairperson Vivienne Yeda said the strong performance was a credible indicator that the turnaround strategy, rolled out the previous financial year, was on course.
The strategy focuses on five core focus areas, namely improving customer experience, growing sales, enhancing revenue collection, enhancing system efficiency, and prudent cost management.
“As a company, we are pleased with this set of results because it is a clear demonstration that the investments we have made in driving a strong performance by the core business lines are beginning to bear fruits,'' Yeda said.
She added that they are cognisant of the fact that a lot more needs to be done to fully transform Kenya Power into a 21st century organisation.
In the year under review, the Company also undertook greater cost management and resource optimisation initiatives.
As a result, operating expenses dropped by 17 per centfrom Sh47.8 billion to Sh39.9 billion mainly due to a reduction in provisions for trade and receivables from Sh3.27 billion the previous year to Sh354 million, which was mainly driven by accounting for revenue, and enhanced revenue collection initiatives.
Finance costs also registered a 27 per cent reduction from Sh12.5 billion in FY2020/21 to Sh9 billion due to a decrease in interest on loans and overdrafts as a result of a Sh20.26 billon repayment of commercial loans which included the partial conversion of overdrafts into a term loan.
System losses, which had risen to 25.21per cent in the first half of the year, were reduced to 22.7 per cent in the second half.
This followed the deployment of a focussed approach premised on the timely metering of customers, replacement of faulty meters, curbing electricity theft arising from meter by-passes and illegal connections, as well as the deployment of data analytics to identify and deal with electricity theft in the large power customer segment.
Overall system efficiency stood at 76.05 per cent as at the end of June 2021.
To further improve system efficiency, the company is planning to increase the coverage of the Advanced Metering Infrastructure (AMI) project, which presently covers 6,718 or 80 per cent of large power customers to full coverage by the end of 2022.
Plans are also underway to expand SME coverage, which stands at 54,272 SMEs, by a further 67,000 during this financial year. The Company has also completed the regional border metering project and is stepping up the implementation of feeder and transformer metering, currently at 33 per cent and 95 per cent completion respectively, to aid in identifying high loss feeders for targeted interventions.
The Company is primarily purchasing green energy, which currently accounts for more than 92 per cent of our total energy mix, making it one of the best ratios in the world.
"Affordable storage will enhance our efficiencies which will in turn increase our reliability and result in more affordable power. As an organization, we are well positioned to take a leadership role in these developments in order to improve customer satisfaction, and ensure the sustainability of our business,” the chairman added.
Edited by CM