•The utility firm is among the at least 150 state corporations that faced delays in the signing off of financial audit and results occasioned by vacuum in the auditor general’s office.
•The auditor general is responsible for the approval of audited financial results for state agencies.
Kenya Power has finally released its audited results for the financial year ended June 30, 2019, confirming a 91.9 per cent drop in profit.
The utility firm is among the close to 150 state corporations that faced delays in the signing off of their financial audit and results, following a vacuum in the auditor general’s office between August last year and June this year.
President Uhuru Kenyatta's nominee-Janet Gathungu took over office in July, almost one year since her predecessor Edward Ouko left in August 2019, after completing his eight-year term.
The auditor general is responsible for the approval of audited financial results for state agencies.
Another entity whose results were affected due to the vacuum was power generating company-KenGen.
In its financials released to investors yesterday, through the Nairobi Securities Exchange (NSE), Kenya Power reported a net profit for the year ended June 30, of Sh262 million, a drop from Sh3.3 billion the previous year.
This, as investors continue to miss out on dividends as the company has already issued a profit warning for the year ended June 2020.
“The directors do not recommend payment of a dividend to shareholders,” the financial results, signed by company secretary Imelda Bore, stated.
The drop in profit is mainly attributed to increased non-fuel power purchase costs which rose by Sh18.1 billion to Sh70.9 billion, from Sh52.8 billion in a similar period in 2018.
This was propelled by the commissioning of two power plants with a combined generation capacity of 360MW.
“In addition, finance costs rose by Sh3.2 billion due to increased levels of short-term borrowing and foreign exchange losses,” Bore notes in results.
The costly purchases eroded gains made on revenues from electricity sales which grew by Sh16.9 billion to close at Sh112.4 billion, from Sh95.4 billion the previous year, a 17.8 per cent increase.
The rise in revenue is partly 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 per cent increase in unit sales from 7,905 GWh to 8,174 GWh owing to an expanding customer base,” the company notes.
During the period, furl costs decreased by Sh5.2 billion or 22.5 per cent from Sh23.5 billion in 2018, to Sh18.2 billion , due to improved energy mix following less utilisation of expensive thermal plants.
Units generated from thermal plants decreased by 904 GWh from 2,202 GWh the previous year , to 1,298 GWh, it notes.
Transmission and distribution costs equally decreased from Sh44.5 billion incurred in 2018, to Sh41 billion.
“The reduction of Sh3.4 billion was mainly due to lower provisions for trade and other receivables during the year compared to the previous year,” the company says.
Investors at the NSE listed company are likely to miss dividends for the third year after it issued a profit warning in June, indicating its profit for the year ended June 2019 will drop by at least 25 percent, a sixteen-year low performance.
It attributes this to the impact of the Covid-19 restrictions, which has led to a major drop in industrial and commercial power demand.
“The Covid-19 pandemic has adversely affected our business operations leading to slow growth in electricity sales and an increase in financing costs resulting in reduced earnings,” Bore said in a notice.
This means profit is likely to dip to Sh196.5 million or lower.
The Government has a controlling stake at 50.1 per cent in Kenya Power with private investors holding the remaining 49.9 per cent.