Lighting Up Kenya Power

Kenya Power Company personnel at work: The Utility is going through a rough patch.

Energy utility Kenya Power has had a difficult year, what with the damaging court case by a consumer organisation, downward retail tariff review dealing a big blow to financial performance.

The high profile arrest of its senior managers and a drop in net profits from Sh5,280 million to Sh1,198 million has sent the share price to its lowest in fifteen years.  Not surprisingly, the Annual General meeting held recently was meant to be a very explosive one.

But it turned out to be one of the calmest AGMs I have attended. What led to that change of heart by the shareholders? Can it be replicated in the market to uplift the share price at the stock exchange and inspire millions of consumers waiting for a good story?

The acceptance that there is a problem inside the company was good strategy coupled with a powerful presentation and assurances by the Principal Secretary Energy Joseph Njoroge, Board Chair Mahboub Mohamed and Ag MD and CEO  Jared Othieno.

The main challenge being growth in revenue, aggressive collection of debtors, retiring expensive short-term loans and reducing technical and commercial losses of which are within their capability of implementations. 

What had a similar comforting effect was the introduction of management staff members that were showcased with many being familiar faces to the shareholders.

The depth of experience and professionalism by the transition team was a unifying factor at the AGM and showed that the human capital levels at the company are unlimited.

The humility and conduct of the whole process by the chairman who allowed the delegates to vent their anger at some points helped to temperate the meeting.

The assurance by the main stakeholder, the government, through the PS, was well reassuring even to the lenders who were in the room despite a stinging report by the Auditor General.

The potential of Kenya Power to recoup its losses is very high. Already the teams are exuding confidence that the half-year results would be much better than last year.

The market is hopeful that retiring of expensive short-term loans, improved collection and tackling the commercial and technical losses will see improved earnings by 25% if not more.

The task at hand is how to take that confidence from the AGM to the stock market. That buoyancy at the AGM is not well exhibited outside the company walls and boardroom.

The whipping from the activities and events this year has not received adequate response hence aggravating the situation. The crisis response to what has happened this year has been lukewarm.

A company like Kenya Power must be able to inspire the country and the region with the big picture effect as it goes through many storms on its way. It needs to showcase how it will benefit from the strategic direction of the BIG 4 agenda. It must motivate its shareholders through constant communications that will uplift the share price.

The quality of power supply has improved considerably, there are pockets across the country that go for months without power interruptions. There is something good that the 12,000 employees do every morning when they report to work. But the company has let other people dictate their story in the market.

The company should be aware that consistent messaging across different networks is the catalyst to uplift the share value. Perception has very big role to play in utility companies. 

The impact of Kenya Power to the economy is not fully understood to a point of defending itself through negative publicity. The lack of strategic response and communication to the crucial issues that impact their business has been slow and wanting.

To conclude, Kenya Power has a chance to showcase what it has done and what it is doing as the consumer and the market is willing to listen.

The writer is an Energy Communication Consultant.