The Kenya Power and Lighting Company ( KPLC) has recorded a loss after tax of Kes.0.94 billion compared to a profit of Kes 0.26 billion in 2019. This was despite a tax credit of Kes 6.1 billion issued by the government.
The tax credit was largely due to a decrease in resident corporate income tax rate from 30% to 25% as one of the Government’s measures to cushion businesses from the negative impact of the COVID-19 pandemic.
The company’s Gross Domestic Product (GDP) contracted by 5.7% in the second quarter of 2020 due to measures instituted to contain the spread of the C0VID-19 pandemic.
KPLC attributed the performance to the challenging operating environment characterised by suppressed economic growth following the outbreak of the COVID-19 pandemic.
However, despite the pandemic’s effects, electricity sales grew marginally by 0.03% from 8,171 GWh the previous year to 8,174 GWh. Simultaneously, total revenue in the period amounted to Kes 133,258 million compared to Kes 133,141 million the previous year, representing a slight increase of 0.09%.
Transmission and distribution costs also increased from Kes 41,043 million in 2019 to Kes 47,834 million in 2020. The increase was attributed to an increase in provisions for trade and other receivables to a total of Kes 3.27 billion as a result of declined revenue collections at the peak of the COVID-19 restrictions.
In addition, the KPLC Board approved the change in accounting estimation for slow-moving and obsolete stock taking a more prudent view, which resulted in increased impairment for inventories to Kes 3.65 billion.
Finance costs in the company increased by 20.96% to Kes 12.48 billion due to an increase in unrealised foreign exchange losses to Kes 3.53 billion due to the depreciation of the Kenya Shilling against major foreign currencies.
Conversely, finance income increased to Kes 123 million from Kes 118 million realized the previous period as a result of improved bank balances.
Consequently, the Company recorded a loss before tax of Kes 7.04 billion for the year ended 30 June 2020 compared to a profit of Kes 0.334 billion the previous year.
In the report issued by KPLC, they said they had initiated a business turnaround and transformation strategy to expeditiously improve the business’s financial and operational aspects while balancing social responsibilities to enhance business sustainability.
The Directors did not recommend payment of a dividend to shareholders for the year ended 30 June 2020.