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| KenGen Managing Director Rebecca Miano. FILE PHOTO | NMG |
KenGen is set to pay its shareholders Sh2.64 billion dividends despite a 12.3 per cent drop in net profit for the financial year ended June 2018, ending investors’ two-year wait.
The Sh7.89 billion profit announced Thursday was a drop from Sh9 billion in previous year. KenGen said on Thursday that it will pay a dividend of Sh0.40 per share, explaining that its bottom-line was pulled down by a higher tax expense despite growth in revenues.
The tax expense rose from Sh2.45 billion to Sh3.85 billion in the period under review in the absence of last year’s tax incentive it enjoyed for having commissioned the new geothermal plant.
“KenGen continued to demonstrate resilience despite a challenging operating environment, pointing to the fact that our strategic execution is strong enough to grow the business going foreward,” said Managing Director Rebecca Miano on the performance.
During the period, total revenue grew by 4.3 per cent to Sh45.28 billion supported by increased electricity and steam revenue. Electricity revenue from geothermal power plant increased by six per cent to Sh17.11 billion.
The firm said energy sales increased by six per cent from 7,556 Gigawatt hours (GWh) in 2017 to 7,989 GWh despite persistent drought which affected water levels in the reservoirs in the first three quarters of the year.
‘”Heavy rains experienced in the last quarter of the year led to increases water inflows in our hydro dams with Masinga peaking at 1,057.75 metres above sea level, highest in 20 years,” said the firm.
Reimbursement expenses shot up by 4.8 per cent to Sh9.4 billion. This, added to increase in operating expenses reduced operating profits from Sh13.5 billion to Sh11.4 billion. This even as finance costs dropped from Sh3.4 billion to Sh3 billion.
