KenGen doubles profit to Ksh.18.4B on tax credits, flat costs

Electricity generating company KenGen has announced a Ksh.18.4 billion profit for the year ending in June 2020 having more than doubled earnings fron Ksh.7.9 billion.

The 132 per cent growth in profit after tax is largely attributable to higher tax credits earned from a lower rate of corporate tax between April and June last year alongside flat operating costs.

KenGen for instance received Ksh.4.6 billion in tax reimbursements from government against Ksh.3.8 billion in tax arrears in 2018 trimming the firm’s deferred tax liability.

Meanwhile, operating costs remained flat having surged marginally to Ksh.10.9 billion from Ksh.10.6 billion in 2019.

The company’s revenue however slid marginally to Ksh.44.1 billion from Ksh.46 billion but saw cushioning from lower reimbursement expenses on fuel and water costs.

Finance costs nevertheless rose by 63.1 per cent to Ksh.8.2 billion from Ksh.6 billion in foreign exchange losses from external borrowings.

KenGen Managing Director Rebecca Miano expects the company’s performance to remain on a solid footing as the economy rebounds from the depths of the COVID-19 crisis.

“We remain optimistic that measures being undertaken by the government to spur economic growth will increase power demand and consumption in the country,” she said.

“We seek to maintain our growth and performance momentum, driven by both our electricity business and revenue diversification. In 2021, we aim to deliver the Olkaria I additional unit six geothermal power plant, which will add 83.3 megawatts (MW) to the national grid. We also aim to scale up diversification of revenue streams through exploration of further regional and local opportunities with a focus on delivery of the ongoing projects in Ethiopia.”

Following the profit growth, KenGen has increased its shareholder pay out to 30 cents per share from 25 cents in 2019 with its earnings per share hitting Ksh.2.79 from Ksh.1.20.