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Wednesday, 2 September 2020

KenGen shareholders to earn less dividends

 KenGen managing director Rebecca Miano speaking at a past briefing/FILE

The Kenya Electricity Generating Company dividend payout for the year ended June 30, 2019 has dropped 37.5 per cent from the previous year, blamed on a challenging business environment.

This follows a decline in after tax profit to Sh7.88 billion from Sh7.89 billion. 

The Nairobi Securities Exchange listed firm will pay a total Sh1.65 billion, where the board has recommended a final dividend of Sh0.25 for every ordinary share of Sh2.50.

Last year it paid out Sh2.64 billion dividends which translated to Sh0.40 for every ordinary share.

Managing Director and Chief Executive Officer Rebecca Miano yesterday said during the period ending June 2019, business remained resilient despite challenging economic conditions in the country and globally.

The KenGen MD who has been handed a fresh three-year term, pegged on her performance, said projections indicate that the medium term macro-economic environment will be tough.

This is on among others, economic shocks brought about by the Covid-19 pandemic.

KenGen recognises that the ongoing Covid-19 pandemic may have an impact on its business. The short-term impact on the company’s performance is likely to be reflected in the 2019-2020 earnings,” she said.

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 1.5 per cent fromSh45.30 billion in 2018 to Sh45.97billion.

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 realised 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.

The company is progressing with additional 439MW projects from sustainable geothermal resources, Miano said, adding that the organization will continue to implement the Revamped Horizon III Good to Great (G2G) Strategy.

Development and implementation of Olkaria 1 Unit 6 is in progress 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, Miano further noted.

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 said.

 The company’s diversification strategy has been gaining momentum with the incorporation of new business lines including consultancy and drilling services.

The electricity generator 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.

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