Kenya Power and Lighting Co. ’s profit jumped after the company and the government tightened the screws on state-owned firms to recover unpaid electricity bills.
Kenya Power’s revenue climbed 21% to 83.6 billion shillings ($734 million) in the six months through December, taking profit to 3.8 billion shillings from 138 million shillings a year earlier.
“Overdue customer debt, for the first time in five years, recorded a reduction of 900 million shillings as a result of enhanced field presence, continued government intervention with state agencies, and increased customer engagements,” the company said in an emailed statement. “In the second half of the year, the business will primarily focus on domestic and SME customers who currently account for 67% of outstanding debt.”
The transmission and distribution company is one of 18 struggling state-owned enterprises that need as much as 382 billion shillings over five years to survive, the National Treasury said in July. The government is reviewing their performance as part of an International Monetary Fund program to improve governance, financial oversight and address debt vulnerabilities.
Higher electricity sales and improved system efficiency added to revenue. On the flip side, a drop in hydro-electric generation meant the company had to buy more fuel to run thermal generators, and the high diesel prices and weaker Kenyan currency bit into profits.
Shares in Kenya Power, of which the government owns 50.1%, have lost 11% this year.