KenGen Records Ksh 5.3 Billion Net Profit in 6 Months.
East Africa’s largest electricity producer, Kenya Electricity Generating Company (KenGen) PLC, posted Ksh 5.3 billion in profits after tax for the six months ending 31st December 2024, representing a 78% growth from Ksh 2.95 billion recorded in the same period in 2023.
In a statement on Thursday, February 6, 2025, KenGen, attributed the growth to a reduction in operating expenses, while revenues remained stable.
“This improvement was fueled by a 13.7% reduction in operating expenses, which fell to Ksh.17.67 billion from Ksh.20.47 billion. Revenues, on the other hand, remained stable at Ksh.27.5 billion,” the statement read.
KenGen, said it achieved a 49.4% increase in operating profit, reaching Ksh.6.65 billion from Ksh.4.45 billion in the previous period.
However, despite the increase in profits, the company’s overall revenues declined to 3.6%, dropping from Ksh.28.5 billion in 2023 to Ksh.27.5 billion in 2024.
Buoyed by higher returns on cash investments and a more stable Kenyan shilling, the company’s finance income rose to Ksh.2.45 billion from Ksh.1.87 billion.
As part of the company’s ability to create shareholder value in a dynamic energy market, KenGen’s earnings per share (EPS) surged by 78% to Ksh.0.80, up from Ksh.0.45.
Meanwhile, finance costs decreased to Ksh.1.13 billion from Ksh.1.49 billion, reflecting improved capital management and debt optimization.
At the same time, tax expenses increased by 42% in the six months to Ksh.2.7 billion, up from Ksh.1.9 billion in 2023, driven by higher profitability.
Reimbursable fuel and water costs also rose by 9.1%, reaching Ksh.4.1 billion from Ksh.3.8 billion in 2023.
The electricity generator mentioned that the electricity demand grew, and the number of national electricity units generated increased by 5.9% during the period.
In terms of electricity sales, there was a 1.9% increase, rising to 4,291 gigawatt hours in the half-year to December 2024, compared to 4,211 gigawatt hours supplied in the previous period.
EABL HALF YEAR RESULTS.
East African Breweries Plc (EABL) has released it's inaudited half-year financial results for the six months ending 31st December, 2024, returning to profit growth in a challenging operating environment.
The first half of the fiscal year witnessed easing inflation and currency appreciation in Kenya and Uganda, contributing to improved business conditions. In Tanzania, the initial currency depreciation at the start of the half reversed towards December as the Tanzanian currency strengthened.
Interest rates across the region also showed a downward trend, further supporting recovery. Despite these positive shifts, some challenges prevailed including shrinking disposable income and input cost inflation impacting the cost of doing business.
EABL posted a net revenue of Ksh67.9 billion, reflecting a 2% increase compared to the same period last year and a volume growth of 1%. The Board recommended an interim dividend of Ksh2.50. This growth momentum is supported by continuous investments in innovative product offerings, impactful marketing campaigns and bolstered by route-to-market efficiencies.
Profit after tax for the period grew by 20%, reaching Ksh8.1 billion, supported by reduced interest cost as the company reduced its debt by Ksh5 billion and foreign currency gains from the strengthening Kenya shilling.
KENYA POWER HALF YEAR PROFIT SURGES.
Kenya Power and Lightening Company (KPLC) , profit after tax surged to Sh 9.97 billion for the half year to December 2024, up from the Sh 319 million it made over a similar half of the 2023-24 financial year. The Utility firm, also reported an interim dividend for the First time in nine years.
Driven by reduced finance costs, increased electricity sales, and lower costs of sales, the company, reported a 3025.4 Percent profit increase.
This remarkable performance has prompted the company to declare an interim dividend of KSh 0.20 per share, marking the first dividend payout in nine years.
The company attributes this surge in profitability to various factors, including improved revenue collection, cost-cutting measures, the strengthening of the Kenya Shilling against major global currencies, and an optimized power generation mix.
Kenya Power recorded a 5% increase in electricity unit sales, rising from 5,225 GWh in 2023 to 5,506 GWh in 2024. This growth is attributed to:
1. Higher electricity consumption across households, industries, and businesses as economic activity picked up post-pandemic.
2. An improved distribution network, leading to better power reliability.
3. New customer connections, facilitated by the availability of essential materials such as meters and transformers.
Despite the rise in unit sales, the company saw a 5.4% decline in electricity revenue, dropping to KSh 107.4 billion from KSh 113.6 billion in December 2023. This was due to a reduction in tariffs, a move that sought to ease the cost burden on consumers but impacted revenue generation.
Another major factor contributing to Kenya Power’s profitability was the sharp decline in finance costs, which fell by KSh 13.1 billion, from KSh 15.0 billion in December 2023 to KSh 1.9 billion in December 2024.
This reduction was largely driven by:
1. The strengthening of the Kenya Shilling, which significantly reduced foreign exchange losses.
2. Loan repayments, reducing the company’s debt burden.
3. Lower interest expenses on foreign-denominated loans.
Kenya Power holds about 90% of its loan portfolio in foreign currencies, particularly the US Dollar and the Euro.
The appreciation of the shilling helped the company mitigate the adverse effects of currency fluctuations, making debt servicing more manageable.
In the same period, Kenya Power resumed repayments of Government of Kenya (GoK) on-lent loans, which had been under a repayment moratorium since March 2020.
This move reflects the company’s improved financial position and commitment to reducing its debt obligations.
Another key driver of Kenya Power’s improved financial performance was the decline in power purchase costs, which dropped by KSh 1.7 billion to KSh 71.4 billion.
The decline was mainly due to:
1. A stronger Kenya Shilling, reducing the cost of power purchase agreements, most of which are foreign currency denominated.
2. An optimized power generation mix, ensuring more efficient and cost-effective electricity production.
3. Lower reliance on expensive thermal power generation, as the country ramped up renewable energy production, particularly from hydro, wind, and solar sources.
Kenya Power has been actively shifting towards renewable energy to lower electricity costs and reduce dependency on costly thermal power generation.
The government’s investment in renewable energy projects has significantly contributed to these efforts, helping the utility firm manage costs more effectively.
Despite the stellar profit growth, Kenya Power reported a KSh 4 billion increase in operating expenses, bringing total operating costs to KSh 23.7 billion.
The rise was attributed to:
1. Higher staff costs, following salary adjustments and hiring to support the company’s expansion efforts.
2. Increased depreciation costs, reflecting ongoing infrastructure investments.
3. Maintenance and operational improvements, aimed at ensuring better service delivery and minimizing power outages.
On the positive side, Kenya Power’s working capital position improved by 30%, reducing from a negative KSh 27.4 billion in June 2024 to negative KSh 18.9 billion in December 2024.
This improvement indicates the company’s enhanced liquidity position and better financial management.
Dividend Payout and Share Price Surge.
For the first time in nine years, Kenya Power declared an interim dividend of KSh 0.20 per share, set to be paid on or about April 11, 2025, with a book closure date of February 8, 2025. The dividend payout signals renewed investor confidence in the company’s long-term stability and profitability.
Following the announcement of its impressive half-year results, Kenya Power’s stock surged 454.3% in a year, trading at KSh 7.76 per share.
The company’s remarkable stock performance underscores growing investor optimism and the potential for continued financial growth.
Kenya Power’s Future Outlook and Expansion Plans.
1. Transition to Renewable Energy and Sustainability Initiatives.
Kenya Power is actively working towards increasing its reliance on renewable energy sources, reducing dependency on expensive thermal power generation. Key areas of focus include:
Expanding solar and wind energy projects, leveraging Kenya’s abundant renewable energy resources.
Investing in energy storage solutions, such as battery storage systems, to enhance grid reliability.
Upgrading transmission and distribution infrastructure, ensuring more efficient power delivery to consumers.
2. Strengthening Smart Grid and Digital Transformation Efforts.
The company has been investing in smart grid technologies to improve efficiency and service delivery. Some key initiatives include:
Implementation of smart meters, reducing electricity theft and improving billing accuracy.
Automated outage management systems, enabling faster detection and resolution of power outages.
Digital payment platforms, allowing customers to make bill payments more conveniently.
These initiatives align with Kenya’s broader Vision 2030 agenda, which aims to modernize infrastructure and promote a more sustainable and digitally-driven economy.
3. Expanding Electricity Access in Rural Areas.
Kenya Power is working closely with the government to expand rural electrification, ensuring more households and businesses gain access to electricity.
The Last Mile Connectivity Project, funded by development partners, has played a crucial role in this effort by subsidizing connection costs for low-income communities.
With ongoing grid expansion projects, the company aims to connect at least 200,000 new customers annually, fostering economic growth and improving livelihoods across the country.
Kenya Power’s record-breaking 3025% profit surge marks a remarkable turnaround for the company, driven by strategic financial management, increased electricity sales, and lower power purchase costs.
The interim dividend declaration after nine years and the stock price surge reflect growing investor confidence in the utility firm’s long-term potential.
As Kenya Power continues to expand its renewable energy portfolio, invest in smart grid technology, and improve financial sustainability, it is well-positioned for long-term growth and profitability.
The company’s ongoing efforts to enhance efficiency, reduce costs, and increase customer connections will play a crucial role in ensuring stable and affordable electricity for Kenya’s growing economy.