KenGen’s 2020 revenue was eroded by almost 15 percent due to a weak shilling but it still went ahead to record an impressive 135 per cent rise in net profit.
The company’s total revenue for the year shrunk marginally to Sh44.1 billion compared to Sh45.97 billion in 2019.
Audited financial results for the year ended June 30, 2020, show the firm lost Sh6.3 billion in currency valuation, 100.8 per cent more than Sh3.18 billion in the previous financial year.
The shilling which traded just above 100 units against the US dollar last February, significantly depreciated as coronavirus took a toll on the global social economy, dropping nearly nine per cent to close the year at 111 units.
Consequently, finance cost increased by 63.1 per cent from Sh5.05 billion to Sh8.24 billion, largely due to a foreign exchange loss of Sh5.9 billion on the company’s foreign exchange denominated borrowings, compared to Sh2.5 billion the previous year.
Despite this, the company posted a more than 100 per cent growth in after-tax profit in the year under review on an Sh8.1 billion reduction in corporate tax rate from 30 per cent to 25 per cent as per the government’s Covid-19 tax relief support.
According to the financial statement, the power generator reported a net profit of Sh18.37 billion up from Sh7.8 billion.
“We appreciate the support provided by the Government during this unprecedented time to enable us to continue providing electricity as an essential service,” KenGen MD Rebecca Miano said.
Gross profits rose to Sh13.9 billion up from Sh11.6 billion, translating to 8.3 per cent growth.
The increase was mainly attributed to the additional revenue contribution by the 165MW Olkaria V geothermal power plant and proceeds from the ongoing geothermal drilling project in Ethiopia.
The listed power utility that accounts for over 65 per cent of the power generated in the country reported a net revenue of Sh39.8 billion up from Sh35.7 billion, due to a reduction in fuel revenue associated with thermal plants, which dropped 58.9 per cent.
The firm’s operations expenses remained flat despite increased operations associated with Olkaria V geothermal power plant, increasing marginally by 0.8 per cent from Sh13.9 billion compared to Sh14.05 billion.
Miano said the company would also continue implementing its corporate strategy to ensure sustainable power growth in the country while leveraging on innovation and partnerships for continued business growth and diversification.
”The business environment remains uncertain and highlights the need to be agile and adaptable to emerging challenges and opportunities,” Miano said.
KenGen’s board has recommended a first and final dividend for the year of Sh0.30 per ordinary share of Sh2.50.
This will be presented during the company’s upcoming Annual General Meeting (AGM) for approval. Recently, the company made a dividend payout of Sh 1.65 billion to its shareholders for 2019.
This will be the third straight year investors at the company are receiving dividends after ending a two-year dividend dry spell in 2018.
While KenGen continues to record profits, Kenya Power, which distributes the energy to end consumers is struggling financially.
The power utility firm reported an unaudited net loss of Sh2.98 billion in the financial year ended June 30, 2020, compared to a net profit of Sh262 million it posted in the year to June 2019.
Kenya Power attributed the first loss in 17 years to reduced electricity consumption due to coronavirus control measures and the rising cost of buying wholesale power from firms like KenGen.
This despite signing debt restructuring instruments with KenGen. It owes the power generator in excess of Sh18 billion