KenGen Net Earnings Flat at 7.9 Billion.
Kengen Kenya has released the much awaited financial results for the 2019 financial year. Kengen also released the results of the first half of the financial year 2020 which ended in on 31st December,2019.
Revenue net of reimbursable increased by 4.8% from Kes. 18,040 million in 2018 to KShs.18,914 million for the six months ended 31st December,2019. This growth was buoyed by a 6.4% increase in electricity revenue from KShs. 15,040 million earned in 2018 to KShs. 16,006 million for the six months ended 31 December 2019 following completion of 165MW Olkaria V geothermal power plant and 127% growth in other income from KShs. 211 million in 2018 to KShs. 479 million for the six months ended 31st December 2019 following roll-out of our business diversification strategy that has seen the Company clinch two drilling contracts in Ethiopia.
”The company will continue with the geothermal led growth strategy. Kengen completed Olkaria V 165MW geothermal power plant in November 2019, construction of 83MW Olkaria 1 Unit 6 geothermal power plant is ongoing. The company is also driving their business diversification strategy. They have ongoing geothermal drilling and consultancy services projects in Ethiopia and Kenya. These initiatives are expected to have positive contribution to the company’s future performance.”
Depreciation and amortization increased by 11.2% from KShs. 5,133 million to Kshs. 5.708 million attributable to depreciation expense for Olkaria V and Right of use assets following adoption of IFRS 16. Operating profit remained flat, gaining marginally by 1.1% from Ksh 6,629 million to ksh 6,700 million. Profit before tax [PBT] rose by 4.3% from Ksh 6,022 million to KShs.6,278 million impacted by lower finance costs following final repayment of the infrastructure bond.
Profit After Tax increased by 98% from KShs. 4,124 million to KShs. 8,170 million for the six months to 31st December 2019. The increase is as a result of capital allowances arising from the completion of Olkaria V 165 MW. This resulted into a tax credit of KShs. 1,892 million compared to a tax expense of KShs. 1,898 million in the previous period.
Net cash and cash equivalent declined from KShs. 8,763 million to KShs. 5,229 million attributable to lower disbursement from borrowings of KShs. 1,900 million following completion of Olkaria V and payment of dividends of KShs 1,846 million.
The company has affirmed to investors that it continues to focus on their revamped strategy which is to grow our core business of power generation amid an increasing competitive market. Kengen also continue safeguarding and creating value for our stakeholders as well as providing a low cost tariff to our economy in support of the Government’s Big Four Agenda. In addition, we are pursuing best operational practices and our power plants continue to deliver the lowest priced energy.
The Board of Directors does not recommend an interim dividend for the period ended 31 December 2019. The Board of Directors shall make a recommendation regarding any final dividend for the year ended 30 June 2019 once the Audit of the financial statements for the said period is completed following the appointment of the Auditor-General.