Kenya Power has posted a remarkable net profit of Sh9.9 billion for the half-year period ending December 2024, marking a significant turnaround from the Sh319 million recorded in the same period last year. The company’s strong financial performance has been attributed to lower costs of sales, reduced finance costs, and increased electricity sales.
The impressive growth comes amid the stability of the Kenya Shilling against major foreign currencies, which helped reduce the cost of power purchases. Additionally, electricity sales increased by five per cent, rising from 5,225 GWh in December 2023 to 5,506 GWh in December 2024. The increase in sales was largely driven by improved network reliability, faster outage resolution, and the connection of new customers. The availability of critical infrastructure such as meters and transformers further facilitated this growth.
Despite the increase in unit sales, overall electricity revenue saw a decline of 5.4 per cent, dropping from Sh113.5 billion in December 2023 to Sh107.4 billion in December 2024. This reduction was linked to lower passthrough costs, a consequence of the Kenya Shilling’s stability and a lower average yield as per the tariff reduction path embedded in the approved tariff structure.
One of the key contributors to the profitability surge was a decrease in power purchase costs. The company reported that the cost of purchasing power fell by Sh1.65 billion to Sh71.4 billion in the review period. The strengthening of the local currency against foreign currencies, in which most Power Purchase Agreements (PPAs) are denominated, played a critical role in this reduction. Furthermore, an optimized power generation mix contributed to cost efficiency. Renewable energy purchases increased to 6,603 GWh, up from 6,199 GWh in the previous half-year period.
However, Kenya Power’s operating expenses rose by Sh4 billion, increasing from Sh19.7 billion to Sh23.7 billion. The rise in costs was attributed to higher operational expenses, including staff remuneration, depreciation, and maintenance costs necessary to support the expanded power network.
The company’s financial position continued to improve, with its working capital deficit reducing by 30 per cent, from negative Sh27.4 billion in June 2024 to negative Sh18.9 billion in December 2024. This improvement was driven by better financial resource management and a commitment to long-term financial sustainability.
In light of the positive performance, Kenya Power’s board has announced an interim dividend of Sh0.20 per share. The company remains focused on sustaining its financial growth through strategic initiatives, including enhancing system efficiency via its transformer metering project and capitalizing on the expected lifting of the moratorium on new power generation contracts.
