Kenya Power and Lighting Company (KPLC) reported a 3.19 billion shillings net loss for the year ended June 2023, blaming it on the sharp rise in financing costs on its hard currency obligations due to the weakening of the Kenyan shilling.
During the period, Kenya Power says that its finance costs rose by 89 percent to 24.2 billion shillings. If the shilling continues being hit by the US Dollar, the current financial year might worsen.
To mitigate the impact of forex exposure on operational performance, Kenya Power says it is working on restructuring its loan book to minimize the loan obligation that is dollar-denominated.
At the same time, Kenya Power says it will continue to tap into new business growth areas to drive demand for electricity for sustainable growth. But, what is ailing this company?
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Why is it ridiculous for them to make losses?
For starters, Kenya Power has no competitor. It is the only company in the country that distributes power to Kenyans. In other words, it enjoys a monopoly. The only competitor has been solar but the update is so insignificant to give Kenya Power a run for their money.
Power tokens are at their highest in history, hitting hard on more than 9 million Kenyans who are customers of Kenya Power. The price of power tokens was increased by at least 67 percent, meaning Kenya Power is making a kill out of it. So, where is the money?
At the same time, Kenya Power, despite receiving prices from the regulator, often adjusts its prices the way it sees fit without warning consumers. Given that at times prices have been spiking, shocking even KPLC themselves, it beats logic for them to make losses.
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