Kenya Power shareholders will spend Christmas in the dark after poor performance disconnected them from dividends.
The listed power distributor posted a 63.7 per cent decline in net profit to Sh1.92 billion in the financial year ended June 2018.
Last year, the company gave investors Sh0.50 dividend per share, despite a Sh1.2 billion hole in its books.
Shareholder Alloys Chami said the firm’s poor performance and corruption cases that saw top managers arraigned in court over the year has lowered investor confidence.
“There is no reason for confidence in Kenya Power unless the board and management work on a turnaround strategy and focus on profits,” Chami told the Star.
Speaking at the AGM held in Nairobi, chairman Mahboub Mohamed termed the financial year ended June 30 the most challenging for the company.
“Various factors adversely affected our operating environment and overshadowed the positive developments previously achieved in our business,” Mahboub said.
He added that negative feedback from dissatisfied customers resulting from challenges in service delivery and subsequent bad media coverage bungled the firm’s fortunes.
Kenya Power was early this year in the spotlight following claims of inflated power bills and a glitch in its electronic payment system that made it impossible to top up tokens on prepaid meters.
Complaints over inflated power bills culminated into a case filed by lawyer Apollo Mboya, later joined by Electricity Consumers Society of Kenya (ECSK) in May.
The parties have since agreed to settle the matter out of court.
No sooner had the dust settled than an internal audit revealed massive irregularities in the company’s procurement department, leading to the arrest of top company heads including MD Ken Tarus and his predecessor Ben Chumo.
“Despite the unfavourable business environment, revenue grew by Sh5 billion from Sh120.74 billion reported in the previous year to Sh125.85 billion helped by a two per cent growth in electricity sales of Sh95.46 billion,” Kenya Power acting managing director Jared Othieno said.
He implored on investors to support management, promising a turnaround. Yesterday, Kenya Power’s share at the Nairobi Securities Exchange (NSE) traded at Sh3.50, having shed 70.8 per cent in value since August last year when it hit a peak of Sh12.
This means that the power man’s market value at NSE as at yesterday was Sh7.3 billion down from Sh23.4 billion in August last year. The firm’s annual report released yesterday shows that it has a total of 1.95 billion shares.