Kenya Power profit up 53pc on higher tariffs

Kenya: Kenya Power posted a 53 per cent rise in first-half profit helped by higher sales and tariffs, and said it would focus on increasing new customers to sustain its earnings.

The company which owns and operates most of the electricity transmission and distribution system in the country said its pretax profit rose to Sh6.4 billion from Sh4.2 billion for the six months to the end of December. Revenue increased by 40 per cent to Sh37.6 billion from Sh26.9 billion recorded in the previous review period.

The firm attributed the improved revenue performance to sales growth and tariff increase.

"We are optimistic that... the company's good performance will be sustained,"  the firm's Chief Executive Ben Chumo said in a statement on the company's trading results.

Chumo added the company is undertaking a capacity enhancement programme in readiness for the oncoming generation capacity which would be evacuated to the national grid and distributed efficiently across the country.

"In line with this, we are undertaking major power projects including fast-tracking the ongoing construction of 29 new substations and conclusion of tenders for 36 new substations located countrywide to further reinforce the system and enhance service delivery to customers," he said.

Kenya's power generation capacity is currently below 2000 megawatts but the Government has set out plans to add 5,000 MW of power generation capacity by 2017 to meet rising demand due to a growing economy.

Demand for electricity from firms and homes outstrips Kenya's installed generation capacity, which frequently leads to blackouts that disrupt businesses and forces them to spend extra funds to install and run generators. Kenya Power is expanding its customer base by electrifying homes in rural and low-income urban homes.