KenGen grew its net profit by nearly half to Sh5.02 billion in the financial calendar ending June, even as its main customer Kenya Power Company, plunged into a loss of Sh3.19 billion.
KenGen’s earnings after tax rose by 48 per cent from Sh3.38 billion in the same period last year, with the power generator attributing it to higher revenues due to enhanced efficiency, especially to its geothermal plants.
Consequently, KenGen, which is listed on the Nairobi Securities Exchange (NSE), announced a final dividend of 30 cents for every ordinary share of 2.50. This amounts to a dividend payout of Sh1.98 billion.
KenGen, which sells virtually all of its electricity to Kenya Power Company, grew its revenues by 14 per cent to Sh53.96 billion in the review period from Sh47.5 billion in the same period last year.
“The commissioning of Olkaria I AU 6 geothermal power plant pushed up our geothermal generation by 24 per cent. This contributed to an overall increase in electricity unit sales from 7,918GWh in 2022 to 8,027GWh,” said KenGen managing director Peter Njenga.
“Currently we are repairing and refurbishing our decommissioned plants and this will affect our future profits considering all equipment we import in dollars. We are encouraged to put more investments by the increasing demand for electricity in Kenya which continues to soar at about five per cent annually,” added Njenga.
However, Kenya Power Company, which also grew its revenues by 21 per cent to Sh190.98 billion, returned to loss-making territory in the year to June 2023 having made a net profit of Sh3.26 billion in the same period last year.
The NSE-listed electricity distributor blamed the weakening of the shilling for its loss. Its finance costs grew by 89 per cent to Sh24 billion from Sh12.7 billion, hurting its bottom line.
The loss is despite the higher tariffs that were meant to cushion it from the rising costs of doing business.
“We had unrealised foreign exchange losses increase from Sh6.5 billion to Sh16.8 billion and this is the key driver in the Sh24 billion financing costs,” said Kenya Power General Manager in charge of Finance, Stephen Vikiru.
Mr Njenga cautioned against the negative effects of recession and depreciation of the shilling warning it will impact its future projects.
In line with demand and the Least Cost Power Development Plan (LCPDP), the company has announced ambitious plans to augment generation capacity by more than 154MW over the next two years through the rehabilitation and uprating of its existing power plants.
As a result of increasing demand, Njenga said the firm will invest more in servicing and refurbishing existing power generating plants which will ultimately add up to operation cost in the next financial year report.
