East Africa: Kenya Power Declares First Interim Dividend in Nine Years

1 February 2025
Daba Finance (Abidjan)
  • Kenya Power & Lighting Co. will pay a 0.20 shilling per share interim dividend for the first time in nine years
  • This follows a 3025.4% surge in net profit to KSh 9.97 billion ($78.2 million) in the six months to December 2024
  • The company attributed its profit growth to lower finance costs, increased electricity sales, and reduced cost of sales

Kenya Power & Lighting Co. will pay a 0.20 shilling per share interim dividend for the first time in nine years, following a 3025.4% surge in net profit to KSh 9.97 billion ($78.2 million) in the six months to December 2024. The company attributed its profit growth to lower finance costs, increased electricity sales, and reduced cost of sales.

Finance costs fell KSh 13.1 billion ($100 million) to KSh 1.9 billion as a stronger Kenyan shilling reduced loan repayment expenses. The company has 90% of its debt in foreign currencies and resumed loan repayments after a moratorium since March 2020.

Electricity unit sales rose 5% to 5,506 GWh, though total electricity revenue declined 5.4% due to tariff reductions. Kenya Power's share price has surged 454.3% in a year, reaching KSh 7.76 per share.

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Key Takeaways

Kenya Power's remarkable profit growth underscores how currency stability and cost management can transform financial performance. The Kenyan shilling's appreciation lowered finance costs and power purchase expenses, driving profitability. Despite higher staff, depreciation, and maintenance costs, the utility improved working capital by 30%. The 5% rise in electricity sales was supported by network reliability improvements and new customer connections. However, the 5.4% drop in electricity revenue due to tariff reductions highlights risks to future earnings. While shareholder returns improve with dividends, the company's foreign currency exposure remains a key factor in financial stability. Kenya Power's market rally reflects renewed investor confidence, but sustaining profitability will depend on currency trends, tariff adjustments, and operational efficiencies.

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