KenGen has nearly doubled its net profit for the six months period ending December 31, 2019, boosted by a tax rebate from construction of a new power plant.
The power producer saw its net profit increase by 98 per cent, hitting Sh8.17 billion from Sh4.12 billion reported in the similar period of 2018. KenGen attributed this to the capital allowance rising from the completion of a 165MW Olkaria V power plant in November 2019.
Completion of the power station, however, led to a net cash and cash equivalent dip from Sh8.76 billion to Sh5.23 billion. This was on the back of lower disbursement from a borrowing of Sh1.9 billion and payment of dividends of Sh1.85 billion.
The firm’s profit-before tax increased by 4.3 per cent. This was on the back of lower finance costs “following final repayment of the infrastructure bond”.
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The company’s Managing Director and CEO, Rebecca Miano, said the growth was buoyed up by a 6.4 per cent increase in electricity revenue – from Sh15.04 billion in 2018 to Sh16 billion for the six months period – following the completion of the Olkaria V geothermal power plant.
Revenue from geothermal power consumption increased from Sh8.6 billion to Sh9.4 billion, which was a 2 percentage rise in contribution to the total KenGen revenue (59 per cent from 57 per cent). Hydroelectricity revenue reduced from Sh4.41 billion to Sh4.39 billion.
KenGen also attributed the growth in revenues to acquisition of two drilling contracts in Ethiopia as part of their business diversification strategy. The company bids to provide cheaper energy amid what they term a competitive market.
“We have already started implementing our diversification strategy and have ongoing geothermal drilling and consultancy contracts in Ethiopia and Kenya,” Miano said.
She said the construction of Olkaria 1 Unit 6 was on course.
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