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Kenya Power’s net Earnings Drop to Kes 262Million

Kenya Power & Lighting Company has this morning released their Unaudited results for the 2019 financial year.

KPLC is among the companies audited by the National Auditor General and has not been able to announce the audited results due to the delay in appointment of the AG.

Key Highlights of their results Include:

  • Revenue rose marginally; 1.3% y/y to KES 133.1B on the back of increased unit sales and tariff reviews.
  •  Total power purchase costs rose 7.2% y/y to KES 90.1B
  •  In effect, the gross margin declined 9.1% y/y to KES 43.0B while operating profit declined 11.6% y/y to KES 10.5B
  • Finance costs rose 46.4% y/y to KES 10.3B due to usage of short term borrowings to bridge cash flow shortfalls and unrealized foreign exchange losses.
  • The group recorded a profit before tax of KES 334M from KES 5.0B in FY18
  • The earnings per share declined to KES 0.13 per share from KES 1.67 per share in FY18. No dividend was declared
  • Cash generated from operations declined 5.4% to KES 26.8B while cash and cash equivalents at the end of the year declined 28.6% y/y to KES 5.4B.
  • Total assets declined 1.3% y/y to KES 328.0B

PERFORMANCE OVERVIEW

Trading Performance The Company recorded a profit before tax of Kshs. 334 million for the year ended 30 June 2019 down from Kshs. 4.968 million recorded in the previous year. This was mainly attributable to increase in non-fuel power purchase costs by Kshs. 18,083 million from Kshs.52,795 million to Kshs.70,878 million following the commissioning of two power plants with a combined generation capacity of 360MW during the period. In addition, finance costs rose by Kshs. 3,267 million due to increased levels of short-term borrowings and foreign exchange losses.

Revenue from electricity sales grew by Kshs. 16,994 million from Kshs. 95,435 million the previous year to Kshs. 112,429 million, representing an increase of

17.8 percent. The rise in revenue was partly 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.

The fuel cost decreased by Kshs 5,302 million (or 22.5 percent) from Kshs. 23,591 million the previous year to Kshs. 18,289 million due to improved energy mix following less utilisation of expensive thermal plants during the year. Units generated from thermal plants decreased by 904 GWh from 2.202 GWh the previous year to 1.298 GWh.

Transmission and distribution costs decreased by 7.8 percent from Kshs. 44,541 million incurred lhe previous year lo Kshs. 41.043 million. The reduction of Kshs.

7.253 million was attributed to less provisions for trade and other receivables during the year compared to the previous year.

Finance costs and interest income

During the year, finance income increased to Kshs.118 up from 100 million realized the previous period due to increased bank balances. On the other hand, finance costs increased by 46.4 percent from Kshs. 7,048 million the previous year to Kshs. 10,315 million due to increased usage of short-term borrowings to bridge cash flow shortfalls and unrealized foreign exchange losses.

Profit

The net profit after tax was Kshs. 262 million compared to Kshs. 3,268 million the previous year, after taking into account a tax charge of Kshs. 72 million

KPLC has not recommended any dividend for the FY2019.