Business

KenGen full-year net earnings jump133pc to Sh18.3 billion

Friday, January 29th, 2021 00:00 | By
Chief executive Rebecca Miano.

Power generator Kenya Electricity Generating Company (KenGen)  has posted a 133.2 per cent jump in net profit to Sh18.38 billion for the full year ending June 2020, more than double the earnings from the Sh7.9 billion recorded in similar period in 2019.

Chief executive Rebecca Miano attributed the positive performance to the government’s corporate tax relief measures to support companies navigate through the Covid-19 crisis.

The tax was cut by five per cent points to 25 per cent from 35 per cent last year. In the year under review, the company’s profit before tax increased by 8.3 per cent to Sh13.9 billion from the Sh11.6 billion announced in a similar period last year.

The company attributed the growth to higher tax credits earned from a lower rate of corporate tax between April and June last year as well as flat operating costs.

It received Sh4.6 billion in tax reimbursements against arrears totalling Sh3.8 billion in 2018.

Miano also attributed the improved performance to additional revenue contribution by the 165 MW Olkaria V geothermal power plant, and proceeds from the ongoing geothermal drilling project the company is undertaking in Ethiopia, the latter which brought in Sh440 million.

”We reported a 13.4 per cent growth in electricity revenue, mainly due to the full operationalisation of the 165MW Olkaria V geothermal power plant in November 2019, which boosted geothermal production by 14 per cent,” she said.

Net revenue increased by 11.3 per cent to Sh39.8 billion, up from Sh35.7 billion in 2019 on the back of reduced fuel revenue from thermal plants, registering a drop of 58.9 per cent in what the company said was displacement of thermal power generation.

Operating expenses remained flat despite the increased operations associated with the Olkaria V geothermal power plant, increasing merginally by 0.8 per cent from Sh13.9 billion to ShSh14 billion.

Miano said despite the Covid-19 headwinds, the company remains optimistic it will weather the storm, driven by the electricity business and revenue diversification.

“In the year ahead, we aim to deliver Olkaria I Unit 6 geothermal power plant, which will add 83.3 MW to the national grid, and continue with our diversification strategy focusing on consultancies, operations and maintenance services, training, and the operationalisation of materials testing laboratory and electronic instruments calibration center,” she said.

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