Kenya Power issues profit warning for the year ending June
Kenya Power has issued a profit warning for the year ending June 2023.
A profit warning indicates that a company's profits for the year are projected to dip by more than 25 per cent, compared to the previous year.
In a statement, Kenya Power attributed the dip in profits to increased foreign exchange losses.
"The Board of Directors of The Kenya Power & Lighting Company Plc wishes to inform shareholders of the Company, potential investors and the general public that the Company’s net earnings for the financial year ended 30 June 2023 are projected to be lower than the earnings reported for the financial year ended 30 June 2022 by more than 25%," the statement read in part.
The company also attributed the fall to with partial impact of 15 per cent reduction of the end user electricity tariffs.
"The warning is based on a review of the Company’s financial performance and an assessment made by the Board, with reference to figures and information currently available. The projected drop in profits is attributable to increased foreign exchange losses arising from the continued weakening of Kenya Shilling against the world's major currencies, along with partial impact of 15% reduction of the end user electricity tariff," Kenya Power added.
In April, the power distributor recorded a Ksh1.3 billion revenue growth, partly boosted by the newly raised electricity tariffs.
"Overall the revenues were up approximately Ksh1.3 billion although there are several dynamics to this not just the tariff," Kenya Power Finance Manager Stephen Kinadira said.
Kenya Power profits for 2022
The company recorded a profit before tax of Ksh5 billion for the year ended June 30, 2022, mainly driven by a 6.9 per cent growth in sales and a 1.5 per cent improvement in system efficiency to 77.57%.
The 2022 performance was also enhanced by a 4.6 per cent reduction in operating costs based on the continued deployment of strategic cost management initiatives.