Kenya Power and Lighting Company (Kenya Power) has reported a decline in revenue for the half-year ending December 31, 2024, despite benefiting from cost savings attributed to a stable Kenya Shilling and reduced finance costs.

According to Kenya Power’s financial disclosures, electricity revenue fell 5.4 per cent from Sh113.6 billion in December 2023 to Sh107.4 billion in December 2024.

This decline was linked to lower passthrough costs and reduced average yields following the tariff reduction path embedded in the approved tariff structure.

While Kenya Power recorded Sh9.97 billion in profit after tax —an increase of  Sh9.651 billion from the previous year’s Sh319 million—the revenue contraction raises concerns about long-term sustainability.

The firm attributed its profitability to lower power purchase costs, which dropped by Sh11.65 billion to Sh71.3 billion.

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"Kenya Power recorded Sh9.97 billion in profit after tax for the half year ended December 31, 2024," Kenya Power stated.

"The impressive financial performance was driven by increased electricity sales, lower cost of sales and reduced finance costs supported by the stability of the Kenya Shilling against major foreign currencies."

This reduction was driven by a favourable exchange rate and an optimised generation mix, with renewable energy purchases increasing to 6,603 GWh from 6,199 GWh in the corresponding period.

The company also reported a 5 per cent increase in electricity sales, rising from 5.225 GWh to 5.506 GWh.

This growth was fuelled by enhanced network reliability, new customer connections, and improved outage resolution timelines, supported by the availability of critical infrastructure such as meters and transformers.

However, this increase in sales was not sufficient to offset the revenue decline.

Meanwhile, operating expenses surged by Sh4 billion, climbing from Sh19.72 billion in the previous period to Sh23.7 billion.

The company cited higher operational expenditures, including staff costs, depreciation, and maintenance expenses required to support the expanded network.

Finance costs fell significantly by Sh13 billion, from Sh1.5 billion in December 2023 to Sh1.97 billion in December 2024.

This was attributed to the strengthening of the Kenya Shilling, which eased the financial burden of foreign-denominated loans, as well as continued repayment efforts, including the commencement of GoK on-lent loan repayments that had been under a moratorium since March 2020.

Despite improvements in its working capital position, which moved from a negative Sh27.44 billion in June 2024 to negative Sh18.99 billion in December 2024, Kenya Power continues to face financial pressures.

Nevertheless, the board of directors announced an interim dividend of Sh0.20 per share, payable on or about 11 April 2025, to shareholders registered by the end of February.

"The Board of Directors is pleased to announce an interim dividend of Sh0.20 per share. The interim dividend will be paid subject to withholding tax where applicable, on or about April 11, 2025 to shareholders registered in the books of the Company at the close of business on February 28, 2025," Kenya Power declared.

Looking ahead, Kenya Power has outlined strategic initiatives to sustain financial performance, including enhancing efficiency, diversifying revenue streams, and advancing the transformer metering project to improve energy balance.

It also aims to capitalise on the anticipated lifting of the moratorium on new power generation contracts to boost electricity sales.

As the firm navigates a complex financial landscape, the interplay between revenue losses and cost savings will remain a critical factor in determining its long-term stability.