KenGen reports 9.2pc dip in first half net profit

Kenya Electricity Generating Company PLC (KenGen) has reported Kshs 2.9 billion in net profit during the first six months of this year, representing a 9.2% year-on-year reduction.

KenGen blames tax expense amounting to Kshs 1.8 billion for the profit decline. It says tax expense surged 25.7% from Kshs 1.48 billion due to an increase in unrealized foreign exchange losses that are disallowable for tax purposes among others.

KenGen says net revenue increased 8.4% to  Ksh 24.7 billion powered by favorable hydrology and heightened plant efficiency, setting the stage for sustained growth in Kenya’s energy sector.

KenGen Managing Director Eng. Peter Njenga

“The operational environment for the aforementioned period was characterized by heavy rainfall that led to an increase in water levels within our hydro dams thus boosting hydro-generation by a remarkable 7%. This substantial boost in hydro-generation played a key role in mitigating the high fuel costs associated with thermal generation, which saw a commendable dip of 3.5%,” said KenGen Managing Director, Eng. Peter Njenga.

Overall, electricity units generated demonstrated a modest improvement of 0.3%, reaching 4,211GWhs. KenGen reported that the national electricity demand continued its upward trajectory, peaking at 2,170.56MW on December 19, 2023, underlining the growing significance of KenGen’s role in meeting the energy needs of the nation.

Net revenue’s robust growth, reflecting the impact of favorable hydrology and enhanced plant efficiency, is mirrored in the 1.8% improvement in profit before tax, which grew from Ksh.4.7 billion in 2022 to Ksh.4.8 billion in 2023.

The company’s operating landscape however witnessed a 16.4% increase in operating expenses, predominantly influenced by higher plant operating and maintenance costs stemming from the global macro-economic pressure.

KenGen maintains a positive outlook, underscoring the escalating national demand for clean electric energy citing noteworthy projects, including the rehabilitation of the Olkaria I geothermal power plant which KenGen says is well on schedule.

Olkaria

At the same time, KenGen says its Olkaria uprating project which aims to increase the combined capacity of two geothermal power plants from 300MW to 340MW is expected to be complete by December 2026.

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