Utility Firm, Kenya Power Remains Optimistic Following Financial Troubles Experienced in 2018

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Kenya Power, the East African country’s electricity distributor, has remained optimistic despite a tumulous 2018. The company’s Board Chairman (Engineer) Mahboub Mohamed confirmed this December that the year has been a challenging one for the firm.

“Various factors affected our operating environment adversely and overshadowed the positive developments previously achieved in our business,” he said.

Speaking at the firm’s Annual General Meeting (AGM) this month, Eng. Mohamed noted that during the year, there were expressions of dissatisfied customers, resulting from challenges in service delivery and subsequent negative media coverage.

“Unprecedented events led to the entire top management team being arraigned in court and consequently being suspended from their duties in July this year,” he said.

“The Board of Directors, however, acted promptly to mitigate these adversities and ensure business continuity despite the circumstances. The Board appointed a team of competent senior management officials on 17th July 2018 to run the Company operations on interim basis,” he added.

“The newly appointed senior management team has the necessary skills, strengths, courage and enthusiasm to deliver on our mandate,” stated Eng. Mohamed.

He said that despite the unfavourable business environment, Kenya Power’s electricity revenue grew by more than Khs5 billion (about $50 million) from Ksh120 billion ($1.2 billion) reported in the previous year to Ksh125 billion ($1.25 billion).

“This increase in revenue was mainly because of a rise in unit sales attributed increased number of customers,” Eng. Mohamed said.

However, the company’s operational costs rose by 14% from Ksh34.7 billion ($347 million) to Ksh39.6 billion ($396 million) because of debt provisions, increased capital investment and the rising cost of doing business.

“The increased capital investment saw our capital asset base growing from Ksh262 billion the previous year, to Ksh273 billion,” Eng. Mohamed said.

“This growth was associated with new capital investments in the period that were aimed at improving quality of power supply, network expansion and accelerated connection of new customers,” he continued.

Meanwhile, Kenya Power’s capital asset base grew by 4.2%. The growth was associated with new capital investments in the period aimed at improving quality of power supply, network expansion and accelerated connection of new customers.

The company now hopes to improve its performance in 2019 given its new appointments and revamped business strategy.

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