KenGen, Kenya’s biggest electricity producer, reported a 9 per cent increase in profit before tax of 7.5 billion shillings for the half-year period ended December 31, 2021, from 6.9 billion shillings which were recorded during a similar period in 2020.
Net revenue increased just 1.3 per cent to stand at 5.1 billion shillings from 5 billion shillings the previous half of 2020. Total revenue increased 14 per cent from 21.8 billion shillings to 24.8 billion shillings.
“Income tax expense increased by 32 per cent to Sh2.34 billion from Sh1.82 billion in December 2020, reflecting the impact of corporate tax reversal from 25 per cent to 30 per cent, and Olkaria V capital allowances, which had resulted in a lower tax effective tax rate of 26 per cent in 2020,” said the firm in a statement signed by its CEO Rebecca Miano
“Consequently, profit after tax rose from Sh5.06 billion in 2020 to Sh5.12 billion for the six months ended December 31, 2021.”
Gross revenue climbed by 13.7 per cent y-o-y to 24.8 billion shillings and this was attributable to higher revenue receipts from drilling consultancy and operations outside Kenya.
Owing to a higher rise in total reimbursable expenses (+236.6 per cent y-o-y to 4.2 billion shillings) in comparison to the growth realized in gross revenues, net revenues grew marginally by 0.4 per cent y-o-y to 20.6 billion shillings.
Total other income came in at 898.0 million shillings (from a loss of 202.0 million shillings in 1H21) supported by a 63.9 per cent y-o-y rise in other income to 295.0 million shillings and positive net gains of 603.0 million shillings.
Total operating expenses went up by 8.0 per cent y-o-y to 14.1 billion shillings mainly driven by higher operating expenses (+13.2 per cent y-o-y to 6.6 billion shillings), depreciation & amortization costs (+2.5 per cent y-o-y to 5.9 billion shillings), and steam costs (+8.3 per cent y-o-y to 1.7 billion shillings following increased dispatch from Olkaria I AU and V geothermal plants).
The company’s operating profit settled at 7.4 billion shillings, 1.8 per cent higher y-o-y. Owing to the higher rise in gross revenue vis-à-vis operating profits, the operating profit margin for the period eased to 29.9 per cent from 33.4 per cent realized in 1H21.
Finance income increased by 21.7 per cent y-o-y to 1.0 billion shillings attributable to interest earned on increased cash balances (related to ongoing projects and rescheduled loan repayments). Finance costs eased by 27.2 per cent y-o-y to 897.0 billion shillings as a result of a reduction in loan balances.
Income tax expense advanced by 32.0 per cent y-o-y to 2.4 billion shillings owing to the reversal of the corporate tax rate to 30.0 per cent (from 25.0 per cent) and Olkaria V capital allowances.
Total assets rose by 1.4 per cent y-o-y to 431.5 billion shillings while total liabilities increased by 1.3 per cent y-o-y to 218.0 billion shillings. Total equity went up by 1.5 per cent y-o-y to 213.5 billion shillings.
Cash and cash equivalents at the end of the year increased by 46.8 per cent y-o-y to 15.8 billion shillings. Net cash generated from operations declined by 18.6 per cent y-o-y to 11.3 billion shillings.
Net cash used in investing activities eased by 28.4 per cent y-o-y to 4.9 billion shillings while net cash used in financing activities surged by 186.6 per cent y-o-y to 4.3 billion shillings.
The company is gearing to commission Olkaria I Additional Unit 6 (83.4 MW) geothermal power plant this year.
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