Increased sales boosts KPLC profits by 49pc

By Macharia Kamau and Reuters

Kenya Power and Lighting Company (KPLC) pre-tax profit rose by 49 per cent in the six months ending December last year.

The figure rose to Sh2.19 billion compared to Sh1.47 billion made during a corresponding period in 2007.

The company attributed the performance to increased sales and a jump in tariffs during the period under review."We should be able to replicate that performance in the second half of the year, maybe with slight variations," Chief Executive Joseph Njoroge said.

Reduction in the amount of energy produced by the hydro power plants and the consequent increased power generation from fuel based power plants saw significant increase in power purchase costs, which stood at Sh27.38 billion and accounted for close to 80 per cent of the company’s operating costs.

Energy units purchased from fuel based plants rose by 140 per cent to Sh18 billion from Sh7.5 billion.

International oil prices remained high during the June to December period, a factor Njoroge said contributed to the significant increase in fuel costs, which are a pass through component and do not constitute an income to the company.

Speaking yesterday while announcing the half year results in Nairobi, Njoroge said the company had connected 98,252 new customers in the first half compared with 69,052 in the same period of the previous year.

Power Demand

This translates to connecting an additional 200,000 new users to the system every year, a target the company said it would achieve given the high demand for power.

"Despite the ongoing economic challenges both locally and internationally, the demand for electricity is growing and we will pursue strategies for expanding our customer base," he said, adding that KPLC would invest more in technology.

Last week, the company announced plans to shift from the current meter system to pre-paid meters over the next five years.

"In addition to this, we are in the process of connecting our large power customers to automatic meter reading, which will enable us to read their meters remotely from our offices," said Njoroge.

Through the Energy Sector Recovery Project, KPLC is also implementing major projects to boost its capacity.