In East Africa, Kenya’s power utility, Kenya Power has experienced growth in its annual trading results due to an increase in sales. The company’s pre-tax profits for the financial year July 2014 to June 2015 rose to Shs.12.254 billion ($118 million) from Shs.11.016 billion ($108 million) recorded during the previous fiscal period.
According to the company’s managing director, Ben Chumo, the boost in sales is the result of an improved power supply and increase connectivity buoyed by a tariff increase effected from December 1st 2013.
“Our electricity sales grew by 5% to 7,130 million units from 6,790 million units recorded in the previous review period,” Chumo said.
Kenya Power: Power purchase costs
According to Chumo, power purchase costs (excluding fuel and foreign exchange costs) jumped from Shs.30.659 billion ($304 million) to Shs.44.46 billion ($431 million) as a result of additional capacity charges by Kenya Electricity Generating Company (KenGen) and Independent Power Producers for new power plants.
Kenya Power’s power purchase units increased by 4.5% to 8,629 GWh from 8,254 GWh, the utility said in a statement.
Chumo explained: “The increased usage of geothermal energy resulted in a 33.7% drop in the fuel cost charge from Shs.13.138 billion to Shs.25.835 billion. This drop was due to the addition of two additional plants which became operational in the period under review.”
The utility has made resources available to fast track the implementation of network upgrade projects including fixing the existing network and the completion of the ongoing substation projects across the region.
Chumo said: “This capital intensive work resulted in an increase in expense costs to Shs24.217 billion [$235 million] from Shs.22.749 billion [$225 million] incurred the previous period.
“The implementation of power system upgrade and expansion projects to improve the quality of service to customers is in line with growth of the business in general.”
Due to this performance the directors of the company have proposed a dividend of Shs.0.50 for each ordinary share payable on 29th February 2016.
Chumo concluded: “Our immediate focus will be on four priority areas which will enable us to take advantage of emerging opportunities for business growth and sustainability.
“These are system expansion, network upgrade, customer connectivity, and loss reduction. These strategies will not only further grow our business but will also increase shareholder value.”