Kenya Power’s profits have shrinked by 63.7 percent to Ksh1.92 billion in the financial year ended June 2018 due to increased operational costs.
The company had issued a profit warning last month. The company says that transmission and distribution costs went up as a result of maintenance activities on expanded network.
Power purchase costs, excluding fuel and foreign exchange costs, increased by Ksh2.59 billion to Ksh52.79 billion.
“This is attributable to an increase in units purchased from geothermal sources in the year by 602 GWh or 13.5 per cent from 4,451 GWh the previous year to 5,053 GWh,” said Kenya Power in a statement.
Finance costs rose by 29.3 per cent to Ksh7.8 billion partly due to increased use of short term loans.
“Finance costs increased by 29.3 per cent from Ksh6 billion to Sh7.8 billion. This was caused by use of short term borrowings to bridge cash flow shortfalls,” said the firm.
Worse still, the current liabilities have exceeded current assets by Ksh51.67 billion, reflecting a 48.5 per cent.
This comes at a time when its supplier, Kenya Electricity Generating Company (KenGen) has fined it Ksh1 billion for flouting the 40-day window credit terms.
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