The energy-generating company, Kengen’s net profit for the half-year period that ended on December 31 2020 dropped to KSh5 billion, from KSh8.17 billion in December 2019, a 38% drop. The firm’s revenue fell by 3% to KSh21.8 billion compared to KSh22.4 billion the year before.
Kengen attributed the drop in revenue to reduced fuel revenue charge due to a drop in thermal generation. Revenue from geothermal generation, Kengen’s main source of revenue, went up by 14% driven by additional generation capacity from the Olkaria V plant and additional income from the Ethiopian geothermal drilling project.
Kengen earned KSh14.06 billion from geothermal power, KSh4.8 billion from hydro power, KSh2.7 billion from thermal power and KSh202 million from wind power.
The firm’s operating expenses increased to KSh5.8 billion in December 2020, from KSh5.6 billion in December 2019, partly due to the operation of the Olkaria V geothermal power plant, one of the largest geothermal power plants in the world.
Kengen suffered a KSh382 million foreign exchange valuation loss in the six months period due to the weakening of the Kenya shilling against major currencies. In addition, finance costs went up by 8% to KSh1.23 billion in December 2020, from KSh1.15 billion in December 2019 mainly due to foreign exchange fluctuations.
The energy-generating company is looking to diversify its revenue stream by offering drilling services in neighbouring countries. Earlier this month, Kengen secured a KSh709 million deal to drill three geothermal wells in Djibouti. The company is also offering drilling services in Ethiopia.
Furthmore, Kengen hopes to deliver Olkaria I Additional Unit 6 geothermal power plant which will add 83 megawatts to the national grid by September 2021.