The 2016 Financial Year Results Outlook for KenGen

By Juma / Published October 31, 2016 | 8:13 am



kengen

Kenya Electricity Generating Company Limited (KenGen), released their 2016 Financial Year results for the period ended 30th June 2016 witnessing a 29 percent incline in total revenues, 30 percent increase in profit before Tax.

The Electricity generator registered a 15 percent increase in electricity revenues, with significant gains in capacity revenue of more than eleven percent, energy revenue by 24 percent and forex recovery 107 percent.

The increase in electricity revenue is attributable to growth in sales through their geothermal, which benefitted from completion of projects, and hydro segment, which realized a 14% increase due to favorable hydrological conditions.

Non-electricity income rallied by 231.83 percent to a record 2.21 billion shillings, emphasizing the company’s drive towards diverse revenues streams such as steam revenues which increased by 86 percent and other income which witnessed an increase of 232 percent; with the latter including drilling services, insurance compensation and miscellaneous income.

The company also witnessed a reduction in steam costs by 14 percent managed to offset an increase in operating expenses; which rose by 501 million shillings being the same as 5.93 percent. Profits before tax for the power generator still increased by 30 percent to 11.26 billion shillings, despite a 4 percent spur in finance costs and a 57.80 percent increase in depreciation and amortization – mostly attributable to its 280MW Olkaria plant.

The compensation tax proved to significantly cap top-line gains, as the company faced a 2.43 billion shillings’ tax levy, for dividends paid to Treasury (KES 5.7Bn) in the last year; slashing the company’s profits by nearly half. The company’s profit after tax slumped to 6.74 billion shillings, this being a drop of 41.45 percent.

The financial ratios show East Africa’s geothermal powerhouse is improving in performance, as EBIT and EBITDA margins record significant increases – of 11 and 15 percent respectively. On the other hand, KenGen’s current ratio -however- increased by 27 percent, attributable to a 19 percent decline in current liabilities. The listed power producer has increased its cash flow from operations by 133.58 percent, showing strong growth in its core business.

Shareholders in the company will, however not receive their dividends for the year due to the slumping in profits.

The table below shows a comprehensive income statement of KenGen:

StatementFY16 in MillionsFY15 in MillionsVariance in %
Net revenue36,40029,29124
Other revenue2,210666232
Operating expenses-8,948-8,4476
Steam costs-3,167-3,689-14
EBITDA26,49517,82149
Interest Income55635955
Finance costs-3,132-3,0114
PROFIT BEFORE TAX11,2648,69030
Income tax expense4,5212,82760
Profit for year6,74311,517-41
TOTAL INCOME6,44765,764-90

 

Read: KQ Posts Ksh 949M in Operating Profit for HY Results

 




About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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