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Corona hurts Kenya Power profit

BUSINESS NEWS
By Standard Reporter | February 26th 2021

Kenya power and lighting company relocate powerlines to pave way for Nairobi expressway in westlands along waiyaki way , Nairobi on Friday, ‎September ‎25, ‎2020. [David Gichuru, Standard]

Kenya Power’s profit after tax for the first six months trading period ended December 31, 2020 fell by 80 per cent, hurt by the coronavirus pandemic.

The power distributor said yesterday its net profit fell to Sh138 million for six months from Sh692 million in the same period of 2019.

It blamed the loss on the effects of Covid-19 restrictions last year that depressed its sales.

Revenue from contracted customers fell marginally to Sh69 billion last year from Sh69.6 billion in the same period of the previous year.

The firm said the measures put in place by the government to contain the spread of the coronavirus suppressed demand for electricity and revenue collection.

“The pandemic had a primary impact on our sales and revenue collection as companies scaled down operations and customers were unable to meet their bill obligations on time due to suppressed incomes,” said Kenya Power Managing Director Bernard Ngugi.

Slow recovery

Electricity sales grew marginally by 0.7 per cent from 4,167GWh recorded in a similar period in 2019 to 4,196GWh in the period under review.

“The curtailed growth is attributed to the slow recovery of electricity demand following a sharp decline in energy consumption at the onset of the Covid-19 pandemic,” the statement said.

However, Kenya Power said the half-year numbers were an improvement from the previous full year ended June 2020 when it reported a loss before tax of Sh7 billion.

The full-year performance was largely impacted by the effects of Covid-19 and a one-off increase in impairment for inventories amounting to Sh3.65 billion “following a business decision to take a more prudent approach in accounting estimation for slow-moving and obsolete stock”.

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