KenGen declares Sh1.3bn dividend after net profit leaps 157pc

KenGen power plant

A Kengen power plant. KenGen has declared a Sh1.3billion dividend payout after its net profit for the financial year ended June 30, 2022, more than doubled to Sh4.7billion mainly on a sharp fall in its income tax expense and capital allowances on its newly commissioned 86.3 megawatts Olkaria I unit 6 power plant.

Photo credit: File | Nation Media Group

KenGen has declared a Sh1.3billion dividend payout after its net profit for the financial year ended June 30, 2022, more than doubled to Sh4.7billion mainly on a sharp fall in its income tax expense and capital allowances on its newly commissioned 86.3 megawatts Olkaria I unit 6 power plant.

The company’s net profit rose from Sh1.8 billion in the period to June last year.

“This is primarily due to the capital allowances on commissioning of the 86.3 megawatt (MW) Olkaria I Unit 6 geothermal power plant during the year that contributed to a reduced income tax expense of Sh3.2 billion compared to Sh13.5 billion in the previous year,” said KenGen.

KenGen’s revenues went up to Sh49.2 billion up from Sh45.7 billion attributed to increased electricity sales to the off-taker while its finance costs dropped from Sh2.3 billion to Sh1.9 billion.

However, the company’s operating costs rose significantly from Sh12.3 billion to Sh15.7 billion due to an increase in drilling costs for the company’s Ethiopia operations.

Drill geothermal wells

KenGen in 2019 set up KenGen Ethiopia to facilitate the execution of commercial consultancy and drilling services contract signed with Tulu Moye Geothermal Operations.

The firm won a Sh5.2 billion tender to drill geothermal wells in Ethiopia, its second deal in the geothermal-rich country.

KenGen had also in February 2019-won part of a Sh7.6 billion contract to supply geothermal drilling services to Ethiopian Electric Power (EEP).

“We are beginning another year ahead with excitement and optimism, having laid out plans to continue the ramp-up of our diversification projects in Ethiopia and Djibouti and new business opportunities that are consistent with our renewable energy focus,” said KenGen.

The company says it will upgrade its 40-year-old 45MW Olkaria I geothermal power plant to a capacity of 51MW and uprate Olkaria I Additional Units 4 & 5 and Olkaria IV from a combined capacity of 280MW to 320MW.

KenGen has recommended a first and final dividend of Sh0.20 per ordinary share of Sh2.5 amounting to Sh1.3 billion.

This is a drop from the share of Sh0.30 the firm paid last year which amounted to Sh1.9 billion.

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