The Board of the Kenya Electricity Generating Company PLC (KenGen) has recommended dividend payout of Sh1.65 billion for its shareholders for the year ended June 30th, 2019.
While releasing the company’s audited results for the year ended June 30th, 2019, the Managing Director and Chief Executive Officer, Rebecca Miano said: “The Board is recommending a final dividend of Sh0.25 for the year for every ordinary share of Sh2.50 which amounts to Sh1.65 billion for the year.”
In 2018, the company paid its shareholder Sh2.64 billion in dividends which translated to Sh0.40 for every ordinary share.
Miano observed that during the period ending June 2019, business remained resilient despite challenging economic conditions in the country and globally.
The KenGen MD said the projections indicate that the medium term macro-economic environment will be tough, compounded by the economic shocks brought about by the Coronavirus Disease (COVID-19) Pandemic.
“KenGen recognizes that the ongoing COVID-19 Pandemic may have an impact on its business. The short-term impact of COVID-19 on the company’s performance is likely to be reflected in the 2019/2020 earnings,” she added.
She was however quick to point out that in the long term, the current conditions present opportunities to diversify as the economy recovers from the crisis.
“The company remains financially robust with the directors reiterating their commitment and confidence in the company’s ability to continue navigating the COVID-19 with associated macro and socio-economic challenges,” she stated.
Notably, during the year ended June 2019, the company’s energy sales grew from 7,989 GWh in 2018 to 8,277 GWh despite dilution of the market share following new entrants. KenGen’s total revenue grew from Sh45.30 billion in 2018 to Sh45.97billion in 2019, leading to a 1.5 percent growth.
KenGen’s other income increased from Sh275 million to Sh619 million, mainly as a result of consultancy services, insurance compensation and tax refund.
In the year ended June 2019, no power plant was commissioned and as a result, KenGen could not benefit from tax credits that would normally be realized from commissioning of new power plants. The company’s 165.4MW Olkaria V Geothermal Plant which was under construction during the year was completed and connected to the national grid in November 2019.
Mrs. Miano also revealed that the company is progressing with additional 439MW projects from sustainable geothermal resources, adding that the organization will continue to implement the Revamped Horizon III Good to Great (G2G) Strategy.
“The implementation of Olkaria 1 Unit 6 progressed with the plant scheduled to bring to the grid 83.3MW by 2021. Contract processes for the 140MW Olkaria VI Plant and Olkaria I rehabilitation (from 45MW to 51MW) are at advanced stages. The implementation of these projects will ensure the company’s continued growth in line with the demand for competitively priced, safe, reliable and quality electric energy in the Eastern Africa Region,” she added.
During the period under review, the company’s tax after profit declined from Sh7.89 billion in the previous year to Sh7.88 billion. KenGen also recorded a drop in profit before tax from Sh11.75billion to Sh11.65billion for the year ended June 30th, 2019.
The company’s diversification strategy has been gaining momentum with the incorporation of new business lines including consultancy and drilling services. KenGen is currently offering geothermal drilling services and undertaking geoscientific studies in Kenya and Ethiopia.
“We are also progressing with the drilling detergent manufacturing project, development of energy park, operationalization of materials testing laboratory and electronic instruments calibration centre among other business lines,” the MD said.
Additionally, the company is exploring business growth through collaborations and partnerships with development partners and agencies.