In a year characterized by both challenges and opportunities, Kenya Electricity Generating Company PLC (KenGen) has exhibited remarkable resilience. As the largest energy producer in Kenya, the company accounts for over 66% of the nation’s renewable electricity consumption.
With a diversified fleet encompassing hydro, geothermal, wind, and thermal resources, KenGen has delivered a total of 8,027 gigawatt-hours (GWh) in 2023 thus far. Notably, investments in geothermal energy played a crucial role in ensuring uninterrupted electricity supply, even in the face of challenges posed by a prolonged drought and reduced hydro generation.
Financial results for the period ending on June 30, 2023, indicate a positive trajectory for KenGen. The company’s revenue increased by 14%, reaching KShs 54.0 billion, up from KES 47.5 billion in 2022. Even more impressive is the 48% growth in profit after taxes, which stands at KES 5.0 billion, up from KES 3.4 billion for the year ending on June 30, 2022.
This exceptional performance can be attributed to a combination of factors, including improved operational efficiency of its geothermal fleet and the successful commissioning of the Olkaria 1 Unit 6 geothermal power plant in July 2022, resulting in a 24% increase in geothermal generation and an overall rise in electricity unit sales to 8,027 GWh from 7,918 GWh in 2022.
While the financial results are indeed impressive, it’s essential to acknowledge the challenges KenGen had to surmount. Operating costs surged by 22% to KES 19.3 billion, up from KES 15.7 billion in 2022, primarily due to increasing insurance and impairment costs.
Additionally, steam costs rose due to higher steam utilization associated with increased geothermal dispatch. Nonetheless, these increased expenses were mitigated by the upswing in revenue, resulting in a 38% pre-tax profit increase to KES 8.5 billion, a significant improvement from KES 6.2 billion in the previous year.
Due to this outstanding performance, KenGen’s shareholders are poised to benefit substantially, with the company’s board recommending a first and final dividend for the year of KES 0.30 per ordinary share of KES 2.50, representing a 50% increase from the previous year. This will total KES 2.0 billion in dividends paid for the period ending on June 30, 2023, an increase from the KES 1.3 billion paid out in 2022.
