Kenya Electricity Generating Company (KenGen) has recorded Ksh13.79 billion profits before tax for the year ended June 30, 2020, a rise of 18.3 percent as compared to Ksh11.7 billion recorded in the previous year.
The rise in profits was attributed to additional revenue contribution by 165MW Olkaria V and Ethiopia operations. Consequently, profit for the year improved further by 133.1 percent from Ksh7.384 billion to Ksh18.377 billion with a tax credit of Ksh4.587 billion.
The tax credit was largely due to the impact of the temporary reduction of the corporate tax rate from 30 percent to 25 percent, introduced as one of the Covid-19 tax relief measures.
The net revenue increased by 11.3 percent from Ksh35.8 billion to Ksh39.8 billion, attributed to a reduction in fuel revenue associated with thermal plants, which reduced by 58.9 percent.
Kengen earned Ksh440 million from the ongoing geothermal drilling plant in Ethiopia.
Reimbursable expenses comprising mainly of fuel charges declined by 57.9 percent from Ksh10.192 billion reported in the previous year to Ksh4.288 billion, owing to reduced dispatch from thermal power plants and reflecting the impact of the 165MW Olkana V geothermal power plant.
Operating expenses remained flat despite the increased operations associated with the Olkaria V geothermal power plant, increasing marginally by 0.8 percent from Ksh13.93 billion to Ksh14.05 billion.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased by Ksh3.783 billion (16.8 percent) from Ksh22.5 billion to Ksh26.25 billion, propelled by the completion of Olkaria V power plant which led to a 13.4 percent increase in electricity generation.
Depreciation and Amortization increased by 16.1 percent from Ksh10.360 billion to Ksh12.030 billion
Finance Costs increased by 63.1 percent from Ksh5.054 billion to Ksh8.244 billion, largely due to a foreign exchange loss of Ksh5.965 billion on the Company’s foreign exchange dominated borrowings, compared with a loss of Ksh2.507 billion in the previous year, as well as the Ksh102 million lease payments following the adoption of International Financial Reporting Standards (IFRS) 16 for leases.
Following the profits, the board has recommended a dividend of Ksh0.30 as compared to Ksh0.25 in 2019 per ordinary share of Ksh2.50. This will amount to Ksh1.978 billion, as compared to Ksh1.649 billion.