Kenya Power and Lightning Company will not be making major profits this financial year closing in on 30 June.
In a cautionary statement released today, the electricity distributor has warned that due to the coronavirus pandemic, there has been a slow growth in electricity sales.
“The Covid-19 pandemic has adversely affected our business operations leading to slow growth in electricity sales and an increasing in financing costs resulting in reduced earnings,” reads the statement from the board of Kenya Power.
In 2018, Kenya Power saw its profit for the last six months to December plunge to 71 per cent from Sh2.458 billion to Sh693 million.
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While in 2019, Kenya Power faced a dip in the year ending June 30, 2019 as earnings dropped by 92.1 percent to Sh262 million in the unaudited trading results.
As the year closed in on December 2019, Kenya Power reported another 72.3 percent drop in profit over a six months period.
The dip in profits was attributable majorly to higher non-fuel power purchasing costs which grew by Sh18.1 billion to Sh70.9 billion in part, from new purchases from the completed Lake Turkana Wind Power (LTWP) project and the 50 megawatt (MW) Garissa solar farm.
The latest cautionary statement to earnings is similar to a profit warning that was issued in September 2019.
However, the Board is adamant that, they are focused on enhancing the company’s financial performance through improving operational efficiency, growing sales, reducing system losses and managing costs.
The company’s share price has currently dropped at the Nairobi Securities Exchange and now trades at Sh2.37 per share and below its Initial Public Offer (IPO) price of Sh2.50 in 1954.