NAIROBI, Kenya, Jun 16 – Kenya Power and Lightning company has issued a profit warning for its financial earnings closing on June 30, 2020, saying its earnings will be much lower than those of the previous year.
The electricity distributor has attributed the projection to the COVID-19 pandemic, saying it has adversely affected business operations leading to slow growth in electricity sales.
Additionally, the virus has led to an increase in financing costs, resulting in reduced earnings.
“Based on a review of the company’s performance the board of directors has determined that the earnings for the financial year ending June 30, 2020 are protected to be lower than the earnings for the previous year,” the firm’s Company Secretary said in a statement.
” The COVID-19 pandemic has adversely affected our business leading to slow growth in electricity sales and increase in financial costs resulting in reduced earnings,” Kenya Power added.
The state agency’s cautionary statement follows a similar one issued last year.
In September 2019, the state agency warned its investors that its profits for the year ended June 2019 would drop, owing to an increase in the cost of purchasing power.
Following the profit warning, Kenya Power reported a 91.98 percent decline in its net profits for the period, to Sh262 million down from Sh3.27 billion made in 2018.
However, its revenue rose by 1.34 percent to Sh133.1 billion pegged on electricity sales, increased power costs and higher finance costs.
The company attributed this to the new purchases from the completed Lake Turkana Wind Power project and the 50-megawatt Garissa solar farm.