KenGen, has reported a Sh 5.12 billion net profit for the half-year ended December 2021 compared to Sh 5.05 billion reported in the same period in 2020 attributed to increased electricity sales and diverse revenue streams.
“Our performance for the six months ended 31st December 2021 remained stable supported by increased income from revenue diversification initiatives and overall growth in electricity demand,” KenGen in the financial report.
The electricity generating company attributed the slow growth in profits to increased expenses which were owed to increased business activities in Ethiopia, repairs and maintenance, and higher steam costs following increased dispatch from its Olkaria geothermal plants.
Consequently, operating costs increased to Sh14.1 billion during the period ended 31st December 2021 as compared to Sh13.1 billion posted during a similar period in 2020.
Even so, KenGen’s total revenues were up by 14 per cent at Sh24.8 billion from Sh21.8 billion.
“This growth is mainly attributed to higher revenue receipts from drilling consultancy operations outside Kenya.”
In June last year, KenGen which currently produces 65% of Kenya’s electricity generation capacity announced its commenced the drilling of the second geothermal well for Ethiopia Electric Power (EPP) in a contract valued at Kshs. 7.6 billion.
Subsequently, the drilling of the Ethiopian well coupled with repairs and maintenance and higher steam cots from Olkaria 1 AU and Olkaria V geothermal plants had an impact on the firm’s operating cost which surged 8% to Kshs. 14.1 billion from Kshs. 13.1 billion.
KenGen also reported a 22% increase in finance income which hit Kshs. 1 billion from Kshs. 829 million as a result of interest it earned on increased cash balances held for ongoing projects and loans whose repayment has been rescheduled as part of COVID-19 relief programme by creditors.
“Finance costs declined by 27% from Kshs. 1.2 billion to Kshs. 897 million owing to a reduction in loan advances.”
Going into the second half of the year, KenGen says its strategy to increase renewable energy capacity and diversify revenue streams is on course.
The electricity generator is also set to add 83.4MW of geothermal power from Olkaria 1 Additional Unit 6 when the plant is completed this year aiding the firm in further reduction of thermal generation.
The board of Directors did not recommend the payment of an interim dividend.