KenGen half year profit down by 38 per cent to Ksh.5.1 billion

Electricity generating firm KenGen has reported a 37.8 per cent profit decline in six months of operations to December 31, 2020 with earnings falling to Ksh.5.1 billion.

The profit decline is largely attributable to declining revenues from electricity sales and the end of tax credit from its capital expenditures.

The firm’s revenues for instance fell to Ksh.21.8 billion from Ksh.22.4 billion in 2019 which the contraction being attributed to reduced fuel revenue charge from the displacement of thermal generation.

Revenue from thermal sources contracted by nearly half/49 per cent to Ksh.2.7 billion from Ksh.5.4 billion in December 2019 to contribute to the overall three per cent slide in revenues.

Meanwhile, KenGen’s past tax credits for capital spending evaporated with the company incurring a Ksh.1.8 billion income tax expense reversing a near equal Ksh.1.9 billion tax credit from last year.

KenGen nevertheless held its expenses at a par Ksh.5.7 billion supported largely by efforts to optimize operating costs through the digitization of business operations.

Financing costs meanwhile rose by eight per cent to Ksh.1.2 billion from foreign exchange (FX) losses resulting from the depreciation of the Kenyan shilling last year.

KenGen’s earnings per share have subsequently declined to 77 cents at the end of the half year financial cycle from Ksh.1.24.

The board of the company has not declared an interim dividend for the period.

KenGen is set to complete a new Unit 6 at its Olkaria 1 geothermal power plant adding another 83 megawatts (MW) to the national grid.