Kenya Power sinks into Sh3.19bn loss, blames dollar woes

Electricity distributor Kenya Power on Thursday posted a Sh3.19 billion net loss for the year ending in June 2023.

The listed state-owned utility had posted Sh3.2 billion in net profit the previous year.

The company attributed the latest performance that saw it return to lossmaking to high finance costs owing to fluctuations in the exchange rate between the dollar and the shilling.

"The overall fundamentals remained stable despite the challenging macroeconomic environment that was characterised by a depreciating shilling and an increase in the overall cost of doing business," said Kenya Power Managing Director, Joseph Siror in a statement.

The state-owned utility, now under new management, had previously posted a net profit of Sh3.2 billion in the fiscal year ending June 2022 and Sh1.49 billion in the year ending June 2021.

Kenya Power's revenue from electricity sales grew by 21 per cent from Sh157.3 billion to Sh190.9 billion, mainly supported by an expanding customer base. This came as operating expenses reduced from Sh36.9 billion in the prior year to Sh34.9 billion in the year.

The utility however said finance costs rose significantly by 89 per cent from Sh12.76 billion to Sh24.15 billion mainly driven by the depreciation of the Kenya shilling against major international currencies.

"The impact of the currency fluctuation as reflected in the finance costs and cost of power purchase eroded the operational gains recorded during the year, resulting in a net loss of Sh3.2 billion," said Kenya Power.

"To mitigate the impact of forex exposure on operational performance, the Company is working on restructuring its loan book to minimise the loan obligation that is dollar-denominated," said Kenya Power.

The company said it would not pay a dividend for the fiscal year that ended on June 30, following the performance