KenGen’s net profit to June hits Sh4.7b
Kenya Electricity Generating Company PLC (KenGen) posted a Sh4.7 billion net profit across 12 months to June 2022 as the firm begins to recoup from its investment in the 86MW Olkaria I Unit 6 power plant.
The profit growth represents a 157 percent growth from Sh1.8 billion recorded the previous year. The Nairobi Securities (NSE) listed firm delayed releasing its full-year performance by 5 months after receiving approval from the Capital Markets Authority (CMA) late.
By end of June, a stable supply of geothermal power earned KenGen a revenue growth of 7.5 per cent from Sh49.2 billion from the previous Sh45.7 billion in 2021.
Growth amid drought
The increase in geothermal power boosted available power capacity in the country during a period of low generation from hydropower plants due to drought in most parts of the year.
“KenGen has strong business fundamentals, posting stable results backed by its growth, innovation, and expansion strategy. We are pleased to report growth in profit after tax for the year ended June 30, 2022, despite prolonged drought which has affected hydropower generation during the period under review,” said KenGen Acting Managing Director Abraham Serem.
Olkaria 1 (6) plant contributed to reduced income tax expense of Sh3.2 billion compared to Sh13.5 billion in the prior year. The power plant, whose construction commenced in 2018 and pushed upwards the national geothermal power to 796MW, generated more than 70 per cent of the country’s renewable energy over the period ending June 2022.
It came from the company’s total fleet of hydro, geothermal, wind, and thermal, with a combined capacity of 1,904MW which delivered 7,918kWh during the year.
The Nairobi Securities Exchange (NSE) listed firm has consequently announced a first and final dividend for the year of Sh0.2 per ordinary share of Sh2.5, amounting to Sh1.32 billion.
In the next fiscal year, the company is planning to increase Olkaria 1 units 4 and 5 and Olkaria IV to grow the capacity of the two geothermal power stations from the current 280MW to 320MW.
The country is on a massive capital-intensive geothermal power production expansion in Africa which is part of KenGen’s revenue diversification strategy amid a heightened shift to clean energy. KenGen will continue with its investment in Djibouti and Ethiopia which increased its operating expenses to Sh15.42 billion largely to the high costs of drilling.
KenGen is also exploring opportunities in the e-mobility sector following its recent launch of four electric vehicles to transition its fleet to battery-powered motor vehicles to cut emissions.
Over the last five years, geothermal power has dominated the country’s generation mix contributing to over 40 percent as hydropower plants contribute slightly above 30 percent, according to Energy and Petroleum Regulation Authority (EPRA).