Kenya Power's Financial Turnaround: A Year of Resilience and Growth

Kenya Power and Lighting Company PLC has released its audited financial results for the year ended June 30, 2024, showcasing a significant turnaround in its economic performance. The results indicate a strong recovery driven by increased revenue, cost efficiencies, and a favorable forex environment.

Key Financial Highlights

The company registered a pre-tax profit of KShs 43.67 billion, a remarkable improvement from the pre-tax loss of KShs 4.43 billion in the previous trading period. This turnaround was primarily fueled by a 21% increase in revenue, lower finance costs, and improved efficiency in power distribution.

Revenue Growth and Cost Management

1. Revenue from contracts with customers surged to KShs 231.12 billion, up from KShs 190.98 billion in 2023.

2. Cost of sales was reported at KShs 150.60 billion, reflecting controlled expenditure on power purchases and operational costs.

3. Gross margin improved significantly to KShs 80.52 billion from KShs 47.39 billion, reflecting increased efficiency in revenue collection and operational management.

Profitability and Expense Management

1. Operating profit more than doubled, reaching KShs 41.49 billion from KShs 19.21 billion.

2. Interest income rose to KShs 1.49 billion, while finance costs dropped significantly to KShs 682 million from KShs 24.15 billion, a direct result of forex gains and strategic financial management.

3. The profit after tax stood at KShs 30.08 billion, a massive shift from the loss of KShs 3.19 billion in 2023.

Business Performance & Strategic Growth

One of the key drivers behind the positive performance was a 21% increase in electricity sales, reaching KShs 198.08 billion. This was fueled by an increase in the customer base, improved metering infrastructure, and enhanced efficiency in revenue collection.

Furthermore, the company recorded forex gains amounting to KShs 28.44 billion due to the strengthening of the Kenya Shilling, significantly reducing its foreign exchange costs. Meanwhile, operating expenses grew moderately to KShs 46.28 billion, reflecting increased investments in network expansion and talent acquisition.

Investments in Infrastructure and Innovation

Kenya Power has continued to enhance its transmission and distribution network, ensuring reliable power supply across the country. The company’s investment in modernizing its infrastructure and deploying smart meters has resulted in improved efficiency and better customer experience.

Additionally, the company has embraced digital transformation, including automated billing and data-driven customer service enhancements, ensuring that customers receive efficient services.

Dividends and Shareholder Value

With the improved financial performance, Kenya Power has proposed to pay a dividend of KShs 0.70 per ordinary share, a positive development for shareholders.