Kenya Power has reported a 63.7 percent decline in net profits, confirming their earlier warning issued in October.
The company had predicted for a decline in their net profits which now stands at 1.92 billion shillings in the financial year that ended June 2018.
The decline has been attributed to an increase in units purchased from geothermal sources in the year by 602 GWh from 4,451 GWh the previous year to 5,053 GWh thus trimming the company’s operating profits by 20.9 percent to 10.79 billion shillings.
Power purchase costs, excluding fuel and foreign exchange costs, increased by 2.59 billion shillings to 52.79 billion shillings.
Finance costs rose by 1.7 billion shillings or 29.3 percent to 7.8 billion shillings partly due to increased use of short-term loans for a firm that is in the negative working capital.
In September, Kenya Power disclosed that their revenue growth in the year was constrained by the depressed economic environment, poor hydrological conditions in 2017 and the protracted electioneering period-adding that the slow business environment had led to a significant decline in their financial performance.
In the year ended June 2017, the company had a total revenue of 120.7 billion shillings mainly because of a near doubling of fuel cost charged to consumers from 12.5 billion shillings to 22 billion shillings.
However, its transmission and distribution costs grew 16.6 percent to 33.4 billion shillings, resulting in a marginal one percent rise in its profit after tax.