Kenya Power is officially broke. This is what an audit of the Kenya Power financials by the Auditor General, Nancy Gathungu has revealed. Ms. Gathungu’s report, which covered the period up to June 2021, show that Kenya Power’s current liabilities far exceed its assets. The liabilities stand at Sh. 116.11 billion while assets currently stand at Sh. 49.63 billion. This means that liabilities exceed assets by a whopping Sh. 66.47 billion.
Ms. Gathungu however noted that Kenya Power’s negative working capital had improved from Sh. 74.84 billion last year. “The board of directors and management in the past and in the year under review indicated strategic initiatives that were being undertaken to improve the financial results as at June 30, 2021. As further stated, this condition, along with other matters as set forth, indicates existence of material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern,” the Auditor General said.
Kenya Power posted a net profit of Sh. 1.5 billion for the full year ended June 30, 2021. The profit was a huge recovery from the Sh. 939 million loss the power provider posted in the same period last year.
The Kenya Power financials showed that profit before tax stood at Sh. 8.2 billion for the period under review, representing a 216 per cent year on year growth compared to a loss before tax of Sh. 7.04 billion in the previous period.
During the period under review, revenue recorded an 8.2 per cent jump from Sh. 133.3 billion the previous year to Sh. 144.1 billion. This was mainly due to an expanded customer base and the heightened revenue protection activities driven by increased field presence.
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Operating expenses dropped by 17 per cent from Sh. 47.8 billion to Sh. 39.9 billion mainly due to a reduction in provisions for trade and receivables from Sh. 3.27 billion the previous year to Sh. 354 million. Finance costs also registered a 27 per cent reduction from Sh. 12.5 billion in FY2020/21 to Sh. 9 billion due to a decrease in interest on loans and overdrafts as a result of a Sh. 20.26 billion repayment of commercial loans which included the partial conversion of overdrafts into a term loan.