Kenya Power Sees 18.7% Decline in Profit Amid Fading Forex Gains and Reduced Tariff Adjustments

Kenya Power Navigates Shifting Fortunes: Profit Declines Despite Long-Term Gains

October 8, 2025

Nairobi, Kenya – Kenya Power and Lighting Company (KPLC) has announced a 18.7 percent decrease in net profit for the financial year concluding in June 2025, registering KSH 24.47 Billion. This represents a shift from the KSH 30.08 Billion recorded in the prior year, a period significantly bolstered by one-time foreign exchange gains.The dip also reflects adjustments in tariff structures, impacting overall revenue.

The company’s profit before taxation experienced a corresponding fall, decreasing 19 percent to KSH 35.38 Billion, down from KSH 43.67 Billion. Revenue also saw a 5.1 percent decline, totaling KSH 219.29 Billion compared to KSH 231.12 Billion-marking the first year-over-year decrease since 2013. Kenya Power officials attributed this downturn to reduced income from foreign exchange activities and moderated adjustments to electricity tariffs, which were partially offset by increased electricity sales.

Resilience Amidst Transition

Despite the recent decline, Kenya Power asserts it’s financial position remains strong. The 2025 profit figure is still three times greater than profits recorded in any financial year prior to 2024. Company leadership credits this resilience to ongoing initiatives focused on cost reduction, improved liquidity, and restructuring of its balance sheet. These efforts aim to position the company for sustained growth and operational efficiency.

Two Decades of Growth

Over the past two decades, Kenya Power has experienced substantial revenue growth, increasing sevenfold from under KSH 30 billion in the early 2000s to its current KSH 219 billion. Profit after tax has mirrored this trend, rising from under KSH 2 Billion to over KSH 24 Billion in 2025. This expansion is tied to continuous investments in infrastructure and network upgrades.

Financial Metric	Early 2000s (Approx.)	2025 (reported)	Change
Revenue (KSH Billion)	< 30	219.29	7x Growth
Profit After Tax (KSH Billion)	< 2	24.47	12x Growth
Total assets (KSH Billion)	< 5	389.04	78x Growth

According to the financial report, finance costs increased substantially to KSH 4.72 Billion, reversing a KSH 683 million gain from the previous year.Tho, the company’s operating cash flow improved by 40.2 percent,reaching KSH 39.77 Billion, which will support ongoing capital investments and debt reduction.

electricity sales rose by 887 gigawatt hours (GWh) during the year,driven by increased customer connections and a more dependable power network. System efficiency also saw an enhancement, reaching 78.79 percent, up from 76.84 percent, due to reductions in both technical and commercial losses.

Operating expenses were reduced by KSH 3.86 Billion, primarily due to lower provisions for bad debts utilizing IFRS 9 standards and tighter cost control. Furthermore,power purchase expenses decreased by KSH 5.94 Billion, benefiting from a more stable Kenyan Shilling and mitigating the impact of foreign exchange fluctuations on energy costs.

Total assets increased by 8.6 percent to KSH 389.04 Billion, demonstrating ongoing investment in grid enhancements, automation projects, and substation upgrades. Shareholders’ equity grew by 25.2 percent to KSH 109.34 Billion, marking the first time the company has surpassed the KSH 100 billion equity threshold.

Kenya Power invested KSH 29.6 Billion in network modernization, substations, and automation projects during the year, an increase from the KSH 24.9 Billion invested in the previous period. While non-current liabilities fell slightly by 1.8 percent to KSH 162.28 Billion,current liabilities increased by 11.3 percent to KSH 117.43 Billion due to short-term obligations.

The company’s strengthened equity position is largely attributed to profit retention and reduced exposure to foreign currency debt. Improved receivable collection processes also contributed to reducing the working-capital deficit.

The board of directors, chaired by joy Brenda Masinde, has approved a final dividend of KSh 0.80 per share, bringing the total dividend for the year to KSh 1.00 per share.An interim dividend of KSh 0.20 per share was previously distributed. The final dividend will be paid on January 30,2026,to shareholders registered as of December 2,2025.

Kenya Power Managing Director Dr. Joseph Siror stated the company remains committed to investing in grid reliability, integrating renewable energy sources, and utilizing digital transformation to enhance the customer experience. He emphasized that the company’s strong financial position and improved liquidity lay the foundation for future enduring growth.

Analysts suggest these results represent a transitional phase following a notably strong 2024, which benefited from foreign exchange gains and tariff adjustments.They anticipate moderate earnings growth in the coming years,supported by ongoing cost-saving initiatives and steady electricity demand.

Understanding Kenya’s Energy Sector

kenya has made significant strides in expanding its electricity access over the past decade, driven by aspiring infrastructure projects and a growing economy. The country is a regional leader in renewable energy, with geothermal, hydro, and wind power contributing substantially to the national grid. According to the International Energy Agency, Kenya aims to achieve 100% green energy by 2030.

Did You Know? Kenya’s Olkaria geothermal complex is among the largest geothermal fields in the world, producing a substantial portion of the nation’s baseload power.

Pro Tip: When evaluating investments in the Kenyan energy sector, consider the impact of currency fluctuations and policy changes on project returns.

What initiatives do you think will be most impactful in securing Kenya’s future energy needs? What role can private investment play in expanding renewable energy capacity?

Frequently Asked Questions about Kenya Power

• What caused the decline in Kenya Power’s net profit in 2025? the decline was primarily due to the absence of one-off foreign exchange gains and moderated tariff adjustments.
• Has Kenya Power’s revenue always been this high? No,revenue has increased sevenfold over the past two decades,demonstrating substantial growth.
• What is Kenya Power doing to improve its financial performance? the company is focused on cost-efficiency programs, liquidity improvement, and balance-sheet restructuring.
• What is the current dividend payout for Kenya Power shareholders? The total dividend for the year is ksh 1.00 per share, with KSh 0.80 as the final dividend.
• What are Kenya Power’s plans for the future? The company plans to continue investing in grid reliability, renewable energy integration, and digital transformation.

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how do reduced forex gains and limited tariff adjustments collectively impact Kenya Power’s financial stability?

Financial Performance Overview: Kenya Power’s Recent Results

Kenya Power and Lighting Company (KPLC) has reported an 18.7% decrease in net profit for the financial year 2024, citing a significant reduction in foreign exchange gains and limited tariff adjustments as key contributing factors.The company’s profit after tax fell to Kshs 3.31 billion, down from Kshs 4.07 billion the previous year. This downturn raises concerns about the utility firm’s financial stability and its ability to invest in crucial infrastructure upgrades. The results,released on [Date – Assume October 7,2025,based on publish date],highlight the challenges facing Kenya’s energy sector.

Key Drivers of the Profit Decline

Several interconnected factors contributed to the diminished profitability of kenya Power:

* Reduced Forex Gains: A weaker Kenyan Shilling (KES) against major currencies, especially the US Dollar, typically benefits Kenya power as it reduces the cost of servicing its US dollar-denominated debts. Though, the rate of depreciation slowed in FY2024, resulting in substantially lower foreign exchange gains compared to the previous year. This was a major blow, as forex gains had previously been a significant contributor to the company’s bottom line.

* Limited Tariff Adjustments: Despite rising global fuel prices and inflationary pressures, the Energy and Petroleum Regulatory Authority (EPRA) approved only modest tariff increases throughout the year. This constrained Kenya power’s ability to fully recover its costs and maintain profitability. The government’s reluctance to implement significant tariff hikes, often due to political considerations, continues to be a challenge for the sector.

* Increased Operating Costs: rising operational expenses, including fuel costs for thermal power generation and maintenance of aging infrastructure, further squeezed margins. the reliance on thermal power, especially during periods of drought when hydropower generation is low, remains a significant cost driver.

* System Losses: Non-technical losses (theft) and technical losses (transmission and distribution inefficiencies) continue to plague kenya power, impacting revenue and profitability. Addressing these losses is a critical priority for the company.

Impact on Kenya’s Energy Sector & Electricity Tariffs

The decline in Kenya Power’s profitability has broader implications for the country’s energy sector:

* Reduced Investment Capacity: Lower profits limit the company’s ability to invest in essential infrastructure upgrades, including expanding transmission and distribution networks, and integrating renewable energy sources. This could hinder Kenya’s progress towards achieving worldwide electricity access and a sustainable energy mix.

* Potential for Future Tariff Increases: To restore profitability and fund necessary investments, Kenya Power may be compelled to seek more substantial tariff increases in the future. This could place a greater financial burden on consumers and businesses.

* Delayed Renewable Energy Projects: Financial constraints could delay the implementation of planned renewable energy projects, such as wind and solar farms, slowing down the transition to cleaner energy sources.

* Increased Scrutiny: The performance will likely lead to increased scrutiny from stakeholders, including the government, investors, and consumers, regarding the company’s operational efficiency and financial management.

Kenya Power’s Debt Situation & Financial Health

Kenya Power’s debt levels remain a concern. The company has a significant amount of outstanding debt, much of which is denominated in US dollars. While the company has been actively managing its debt portfolio, the fluctuating exchange rate poses a continuous risk.

* Current Debt Levels: As of [Date – Assume September 30, 2025], Kenya Power’s total debt stood at approximately Kshs [Insert Estimated Figure – Research Needed].

* Debt-to-Equity Ratio: The company’s debt-to-equity ratio is currently [Insert estimated Ratio – Research Needed], indicating a moderate level of financial leverage.

* Credit Rating: Kenya Power’s credit rating is [Insert Current Credit rating – Research Needed], which influences its ability to access financing at favorable terms.

Government Intervention and policy Changes

The Kenyan government is actively involved in addressing the challenges facing Kenya Power. Recent initiatives include:

* The Energy Act 2019: This legislation aims to liberalize the energy sector, promote competition, and attract private investment.

* The Last Mile Connectivity Project: This project aims to extend electricity access to underserved areas, but its financial sustainability is under review.

* Review of Power Purchase Agreements (PPAs): The government is renegotiating PPAs with self-reliant power producers (IPPs) to reduce the cost of electricity. This is a complex process with potential legal challenges.

* Focus on Renewable Energy: Increased investment in renewable energy sources, such as geothermal, wind, and solar, is a key priority for the government.

Addressing System Losses: A Critical Priority

Reducing system losses is paramount for improving Kenya Power’s financial performance. The company is implementing several measures to combat both technical and non-technical losses:

* Smart Metering: Deploying smart meters to improve billing accuracy and detect electricity theft.

* Network Upgrades: Investing in modernizing the transmission and distribution network to reduce technical losses.

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