Imagine being in a market with no competitor. Imagine setting your own prices and determining who gets the service and who does not get but still make massive losses. This is the story of Kenya Power and Lighting Company.
For the financial year ended June 30, 2019, the profits for Kenya Power and Lighting Company (KPLC) dropped by 91 percent with the company attributing it to high costs during the period.
The company took a long time to announce the results saying it was waiting for President Uhuru Kenyatta to appoint the Auditor General who was supposed to satisfy the results before they are released to the public.
Kenya Power reported a net profit of 262 million shillings compared to 3.3 billion shillings the previous year attributing the loss to increased non-fuel power purchase costs.
The non-fuel purchase costs, according to the listed company, rose by 18.1 billion shillings to 70.9 billion shillings, from 52.8 billion shillings in a similar period in 2018.
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“In addition, finance costs rose by 3.2 billion shillings due to increased levels of short-term borrowing and foreign exchange losses,” said the company ina statement.
The revenue from electricity sales grew by 16.9 billion shillings from 95.4 billion shillings to 112.4 billion shillings attributed to a tariff review at the beginning of the year prior to the subsequent tariff harmonization that lowered rates for Small commercial customers and broadened life-line tariff for domestic customers.
“The growth in revenue was also supported by a 3.4 percent increase in unit sales from 7,905 GWh to 8,174 GWh owing to an expanding customer base.”
At the same time, the directors of Kenya Power and Lighting Company did not recommend the payment of a dividend to shareholders meaning the shareholders will not be getting anything for the financial year.
“Kenya Power will continue to implement the ongoing business turnaround strategy to improve operational efficiency and ensure financial sustainability,” the statement further said.
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