Kenya Power has posted a 16.3 per cent drop in net profit to Sh3.76 billion for the half year to December 31 and slashed dividends by more than half.
The utility’s dip in profitability is attributed to the depreciating shilling in the period that almost doubled its foreign exchange costs from Sh1.6 billion to Sh3 billion.
In a statement accompanying results approved by the company board suiting Thursday day, the firm also attributed its drop in fortunes to increased distribution costs as more consumers join the grid.
It cut its dividend to Sh200 million from half a billion at the same period the previous year.
“Transmission and distribution costs rose by Sh2.6 billion due to increased maintenance activities on the expanded. The non-fuel power purchase costs went up by Sh4.1 billion attributable to payment of additional capacity charges on new plants,” read the statement.
The additional capacity charges are paid to the Kenya Electricity Generating Company (KenGen) and independent power producers for new power plants with the amounts climbing as more units of electricity purchased to meet demands.
Customer base expanded by 4 per cent for the commercial and industrial category while domestic customers grew by 10.4 per cent for the half year.
Revenue for the half year period stood at Sh56.7 billion down from Sh57.9 billion recorded in the same period last year.
The power utility’s directors recommended an interim dividend for the period of Sh0.20 per ordinary share of Sh2.50.
During the period under review, the company’s sales went up 5.6 per cent earning Kenya power Sh4 billion more compared to last year’s sales of Sh37.6 billion.