Kenya Power announced a 16.4 per cent drop in net profit for the half year ended December, as increased expenditure offset additional income earned from connecting an additional 1.1 million customers in the period.
The utility’s net profit stood at Sh3.7 billion in the six months compared to Sh4.5 billion the year before, even as the number of customers jumped to 4.1 million from three million.
The profit drop came as the company’s total revenue, including charges like fuel cost adjustments that are later remitted to power producers, dropped two per cent to Sh56.7 billion. The performance indicates that the record electricity connections are yet to boost the bottom-line.
“The drop (in profit) was largely attributed to rise in power purchases with addition of new power to the grid and the ongoing power system reinforcement project implemented to stabilise the electricity network,” Kenya Power’s CEO Ben Chumo said in a statement.
He noted that transmission and distribution costs rose 25 per cent to Sh13 billion from Sh10.5 billion.
“We remain confident that there is room for growth for the company,” said Mr Chumo.
Domestic consumers are the single-largest users of electricity at one billion kWh in the review period.
They are followed by industrial consumers who fall into various categories based on the level of voltage at which they are supplied.
Total operating expenses remained flat at Sh49.2 billion though specific items like finance and distribution costs rose significantly.
Kenya Power declared an interim dividend of Sh0.2 per share, same as the previous year. The interim dividend is to be paid on April 29, two months after the company will have paid a final dividend of Sh0.3 per share for the year ended June 2015 on February 29.
The Nairobi Securities Exchange-listed firm has left its dividend payout unchanged at a total of Sh0.5 in each of the past few years.
The revenue directly attributable to the utility rose 10.8 per cent to Sh41.6 billion, with the company’s sales of electricity units having jumped 5.6 per cent to 3.6 billion kilowatt-hours (kWh).
Kenya Power continues to lose a fifth of all electricity its buys from power producers to theft and system inefficiencies.
The utility’s electricity purchases rose 4.9 per cent to 4.5 billion kWh but it only delivered 3.6 billion kWh to end users.
The company said its electricity losses would have been worse by 30 million kWh had it not improved its distribution efficiency to 80.1 per cent from 79.6 per cent.