Weaker shilling pushes Kenya Power into Sh3.19bn loss
Kenya Power's offices on Aga Khan Walk, Nairobi.
What you need to know:
- Despite the loss, Kenya Power's operating profit grew by 12 percent from Sh17.15 billion posted the previous year to Sh19.21 billion.
- Kenya Power has reported net losses on only two other occasions in the last 20 years — Sh939 million in 2020 and Sh3.05 billion in 2003.
Kenya Power has reported a net loss of Sh3.19bn for the full year ended June 2023. This is a reversal of the Sh3.26 billion net profit it made during the same period in 2022.
The utility firm cited higher finance costs caused by the depreciating shilling as the reason for the loss. An 89 percent jump in financing costs to Sh24 billion from Sh12.7 billion hurt its bottom line, despite a 12 percent rise in operating profit to Sh19.2 billion.
Despite the loss, Kenya Power's operating profit grew by 12 percent from Sh17.15 billion posted the previous year to Sh19.21 billion.
Kenya Power has reported net losses on only two other occasions in the last 20 years — Sh939 million in 2020 and Sh3.05 billion in 2003.
Companies that are highly exposed to foreign exchange debt or payment obligations, such as Kenya Power and Kenya Airways, are paying a steep price for the depreciation of the shilling by 17.9 percent against the dollar this year, to exchange at 150.27 units.
The utility’s top line revenue grew by 21 percent to Sh190.98 billion, driven by higher power sales following the introduction of enhanced tariffs during the period. On the expense side, cost of sales rose by 22.4 percent to Sh143.57 billion on account of higher power purchase costs due to fuel price increase.
