Kenya Power warns market of a drop in profit due to coronavirus
Seth Onyango @SethManex
Utility firm, Kenya Power has warned investors of major drop in earnings for the financial year ending June 30, citing the raging Covid-19 pandemic which has slowed manufacturing in the country.
In a cautionary statement issued on Tuesday, the listed firm told shareholders to anticipate a dip in profit due to decline in electricity sales.
“The Covid-19 pandemic has adversely affected our business operations leading to slow growth in electricity sales and an increasing in financing costs resulting in reduced earnings,” it said.
“Based on a review of the company’s financial performance, the board of directors has determined that the earnings for the financial years ending June are projected to be lower than the earnings for the previous year.”
This makes the fourth year that the power distributor has shed profit.
Power booked a 92 per cent drop in earnings for the year ending June 30, 2019, highlighting the tough economic times the utility company is undergoing.
It posted an after-tax profit of Sh262 million compared to 2017’s Sh3.2 billion despite a 17.8 per cent growth seen in electricity revenue.
This development prompted analysts to say that the Nairobi Securities Exchange-listed firm might need a power tariff review to offset high-power purchase costs.
In 2018, the power distributor’s earnings for the last six months to December declined 71 per cent from Sh2.458 billion to Sh693 million.