Kenya Power Shares Slide After FY2025 Results: What Investors Should Know

Kenya Power’s stock plunged nearly 20% after the company released its full-year results for the year ended 30 June 2025, reflecting investor disappointment despite operational gains.

The rout followed headlines showing an 18–19% decline in net profit and a drop in earnings per share, facts that spooked short-term holders after a recent strong rally.

The Numbers Behind the Tumble

Kenya Power reported profit after tax of KSh 24.47 billion, down from KSh 30.08 billion a year earlier, an 18.7% decline, while revenue fell 5.1% to KSh 219.29 billion.

Basic earnings per share dropped to KSh 12.54 from KSh 15.41 the prior year. The board proposed a final dividend of KSh 0.80, bringing the full-year payout to KSh 1.00 per share (including an interim).

Why Profits Fell, and Why the Market Cares

Management cites three main drivers:

• Lower tariff yields: after tariff reductions intended to ease energy costs for consumers;

• Reduced foreign-exchange recoveries: after a more stable Kenyan shilling (previous FX gains reversed); and

• Higher finance costs: due to the reversal of previous unrealised forex gains.

Put simply, Kenya Power sold more electricity (unit sales rose), and distribution efficiency improved, 9but lower unit prices and weaker FX recoveries shrank headline profits. Investors, who had bid the stock up sharply in recent months, interpreted the results as evidence that earnings momentum may be weaker than expected.

Market reaction and context

The share price drop followed a period of very strong performance, the stock had run up significantly earlier in the year, leaving it vulnerable to profit-taking once results failed to beat elevated expectations. Kenyan Wall Street put the slide at roughly 19.8%, while other market commentators described the move as a mix of disappointment and short-term repositioning.

The Bright Spots, and the Caveats

Kenya Power’s operating story still shows progress: system efficiency improved (distribution and transmission efficiency rose to 78.79%, operating costs fell, the working-capital deficit narrowed, and cash from operations rose sharply, all signs of stronger internal controls and liquidity management. The company also reduced its loan book by about 11%, lowering interest expense exposure

But these positives are tempered by structural risks: tariff policy remains a political lever; FX dynamics can flip quickly; and finance costs (including the impact of past exchange-rate movements) can drag margins unexpectedly. For investors, that mix means earnings are still vulnerable to macro moves and regulatory choices.

What Investors Should Watch Next

1. Tariff trajectory: any further cuts or delays in allowed tariff adjustments will directly affect margins.

2. FX and finance costs: watch foreign-exchange recoveries and reported finance charges in quarterly updates.

3. Dividend confirmation: shareholders will watch the AGM for confirmation and timing of the proposed final payout.

The market sell-off reflects a classic mismatch: robust operational metrics on one hand, but disappointing headline profitability and squeezed investor expectations on the other.

Kenya Power has demonstrable improvements in efficiency and balance-sheet strength, but until revenue drivers (tariffs and FX recoveries) normalize, the stock will likely see volatility.