Kenya Power has announced a net profit of Sh9.9 billion for the six months ending December 2024, marking a significant rebound in profitability since last year. This is a stark contrast to the Sh319 million profit after tax recorded during the same period last year.
The surge in profits this year is largely due to a decrease in the cost of sales and lower finance expenses, thanks to the stability of the Kenya Shilling against major foreign currencies. Additionally, electricity sales saw a five percent increase, rising from 5,225 GWh to 5,506 GWh.
However, despite this growth in sales volume, total electricity revenue fell by 5.4 percent, dropping from Sh113.5 billion in December 2023 to Sh107.4 billion in December 2024. This decline is linked to reduced passthrough costs, as the Kenya Shilling’s stability led to a lower average yield in line with the approved tariff reduction path.
The cost of power purchases decreased by Sh1.65 billion, bringing it down to Sh71.4 billion during the review period, benefiting from the strengthening of the Kenya Shilling against the currencies in which most Power Purchase Agreements (PPAs) are denominated.
In terms of renewable energy, the company purchased 6,603 GWh, up from 6,199 GWh in the previous half-year.
Operating expenses increased by Sh4 billion, rising from Sh19.7 billion to Sh23.7 billion, driven by higher operational costs, including staff salaries, depreciation, and maintenance expenses necessary for supporting the expanded network.
During this period, the company also began repaying government on-lent loans that had been under a repayment moratorium since March 2020.
The working capital situation showed improvement, with a 30 percent increase from negative Sh27.4 billion in June 2024 to negative Sh18.9 billion in December 2024, as management focused on optimizing financial resources to achieve sustainability.
The board has declared an interim dividend of Sh0.20 for each share.
The Company is progressing with the transformer metering initiative aimed at enhancing energy balance and boosting system efficiency.
Kenya Power is also eager to take advantage of the expected removal of the moratorium on new power generation contracts to boost electricity sales in response to rising peak demand.
