KenGen reports 9 per cent increase in half-year profit – Kenyan Business Feed

State Energy producer KenGen has reported a 9% increase in profit before tax of Kshs. 7.5 billion for the half-year period ended December 31, 2021.

The gross profit which has risen from Kshs. 6.9 billion recorded during a similar period in 2020 is attributed to increased electricity sales and diverse revenue streams.

Net revenue increased just 1.3% to stand at Kshs. 5.1 billion from Kshs. 5 billion the previous half of 2020.

“Our performance for the six months ended 31st December 2021 remained stable supported by increased income from revenue diversification initiatives and overall growth in electricity demand,” said KenGen in the financial report.

During the period under review, total revenue increased 14% from Kshs. 21.8 billion to Kshs. 24.8 billion.

“This growth is mainly attributed to higher revenue receipts from drilling consultancy operations outside Kenya,” said KenGen.

In June last year, KenGen which currently produces 65% of Kenya’s electricity generation capacity announced its commenced the drilling of the first geothermal well for Ethiopia Electric Power (EPP) in a contract valued at Kshs. 7.6 billion.

Subsequently, the drilling of the Ethiopian well coupled with repairs and maintenance and higher steam cots from Olkaria 1 AU and Olkaria V geothermal plants had an impact on the firm’s operating cost which surged 8% to Kshs. 14.1 billion from Kshs. 13.1 billion.

KenGen also reported a 22% increase in finance income which hit Kshs. 1 billion from Kshs. 829 million as a result of interest it earned on increased cash balances held for ongoing projects and loans whose repayment has been rescheduled as part of COVID-19 relief programme by creditors.

“Finance costs declined by 27% from Kshs. 1.2 billion to Kshs. 897 million owing to a reduction in loan advances.”

Going into the second half of the year, KenGen says its strategy to increase renewable energy capacity and diversify revenue streams is on course.

The electricity generator is also set to add 83.4MW of geothermal power from Olkaria 1 Additional Unit 6 when the plant is completed this year aiding the firm in further reduction of thermal generation.

The board of Directors have not recommended an interim dividend.

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