Shareholders in KenGen will not receive their dividends this financial year, the management has announced. The electricity generator which went public in 2006, has been consistent in paying out its dividends to shareholders and this will be the first time in 10 years it will not.
The company announced its net profits to June this year which had dropped by 41 percent to 6.7 billion shillings. This huge drop forced the management to announce the dividend drought, putting off the shareholders from what they are used to for the last nine years.
In June, the company asked its shareholders to take part in a 28.6 billion shilling rights issue which was undersubscribed. The company, in statement, said that it is not paying out the dividends as a ways of sustaining the “current growth direction…and their investment plan to drive geothermal and wind generation capacity growth.”
The government, through the Treasury owns more than 70 percent of the stake in KenGen. The power generator owns more than 30 power generating plants across the country. The company is also undertaking new projects like Olkaria V which has been planned to take off at the end of the year and with a capacity of generating 140 Megawatts of electricity, Meru Wind Phase 1 as well as Ngong Wind Phase 2 all in the process of being implemented.
During the second quarter, the company has seen its operating expenses increase by 28.8 percent to 8.94 billion shillings by June with total assets growing by 7 percent to 367.2 billion shillings while the revenue for the year to June has increased by 28.8 percent to 38.6 billion shillings.
In other news, operation at Kenya Airways are slowly coming back to normal after pilots suspended their strike which had affected the operations at the giant airline. On Wednesday trading session at the NSE, the companies share rose to more than six percent as the management says things will turn back to normalcy soon.