Kenya Power board has today issued warning to investors that its earnings for the financial year ending June 30, 2020, will be lower than earnings posted at a similar period the previous year.
In a statement, Kenya Power board attributed the lower projections on adverse effects of COVID-19 Pandemic that has lead to slow growth in electricity sales and an increase in financing costs resulting in reduced earnings.
“Based on a review of the company’s financial performance, the board of directors has determined that the earnings for the financial year ending June 30, 2020 are projected to be lower than the earnings for the previous year,” the board said in a statement.
The company’s board is putting a brave face by assuring investors that the management is committed to shore up its already battered financial performance.
“The board and management are focused on enhancing the company’s financial performance through improving operational efficiency, growing sales, reducing system losses and managing costs,” read the statement.
The national power distributor’s net earnings for the financial year ended June 30, 2019 tanked to Sh 262 million compared to Sh 3.3 billion posted the previous year.
The 92 per cent drop in profit was attributed on high cost of purchasing electricity from two hydro-electric plants.
The firm’s share price at the bourse has dropped to Sh 2.37 per share, below its Initial Public Offer (IPO) price of Sh 2.50 in 1954.