Home Business KenGen profit more than doubles to Sh18bn

KenGen profit more than doubles to Sh18bn


Companies

KenGen profit more than doubles to Sh18bn


olk

Olkaria geothermal plant. FILE PHOTO | NMG

BDgeneric_logo

Summary

  • The power producer reported a 133pc jump in net profit to Sh18.38 billion on the increased output of cheaper geothermal.
  • Electricity demand peaked at 1,966MW on December 11 surpassing levels seen before the pandemic of 1,926MW.
  • The board declared a dividend of Sh0.30 per share up from Sh0.25 in 2019.

Power producer Kenya Electricity Generating Company (KenGen) #ticker:KEGN has posted a 133 per cent jump in net profit to Sh18.38 billion for the full year ending June 2020 on the increased output of cheaper geothermal and tax savings.

The company completed its Olkaria V geothermal plant in the year under review, which helped it cut reliance on thermal generators saving on costs while boosting its electricity sales by 11.3 per cent to Sh39.8 billion.

Costs from the use of the thermal plants, mainly fuel charges, declined 57.9 per cent from Sh10.1 billion to Sh4.2 billion.

“KenGen recorded a 13.4 per cent growth in electricity revenue mainly attributed to the full operationalisation of our 165MW (megawatts) of Olkaria V geothermal power plant in November 2019 which boosted geothermal production by 14 per cent,” managing director Rebecca Miano said on Thursday.

The electricity producer received a tax credit of Sh4.59 billion from the Kenya Revenue Authority during the period, in contrast with the preceding year when it had paid Sh3.79 billion.

“The tax credit was largely due to the impact of the temporary reduction of the corporate tax rate from 30 per cent to 25 per cent introduced as one of the Covid-19 tax relief measures,” Ms Miano said.

The company said it witnessed demand challenges due to coronavirus lockdowns on businesses and industry which partly affected the second half of the year.

The government introduced containment measures to curb the spread of the virus in March following the reporting of the first Covid-19 case in Kenya.

Electricity demand, however, picked up following the reopening of the economy, KenGen said, to peak at 1,966MW on December 11 surpassing levels seen before the pandemic of 1,926MW.

Ms Miano said the firm sees increased revenue going forward hinged on increased power sales and diversification strategy.

“In 2021, we aim to deliver the Olkaria I additional unit 6 geothermal power plant, which will add 83.3MW to the national grid,” Ms Miano said adding that the firm would also “focus on delivery of the ongoing projects in Ethiopia.”

The Ethiopia project generated Sh440 million in revenues in the period under review.

The board declared a dividend of Sh0.30 per share up from Sh0.25 in 2019.

KenGen controls 64 per cent of the electricity generation market share with an installed capacity of 1,803MW.



Source link