KenGen’s net earn­ings drop by Sh4.8bn on tax credit write-off

This eroded a 29.57% rise in pre-tax profit to Sh11.26bn from Sh8.69bn pre­vi­ously

The Star (Kenya) - - News - CON­STANT MUNDA @munda­con­stant

KenGen’s net earn­ings for the year ended June 30 dropped 41.49 per cent com­pared to the year be­fore due to a tax charge, the state-owned elec­tric­ity pro­ducer an­nounced late Wed­nes­day.

Net profit fell to Sh6.74 bil­lion from Sh11.52 bil­lion a year ago af­ter the firm, con­trolled 70 per cent by the state, paid a tax of Sh4.52 bil­lion as op­posed to the pre­vi­ous year when it en­joyed a one-off Sh2.83 bil­lion tax credit.

This eroded a 29.57 per cent rise in profit be­fore tax­a­tion to Sh11.26 bil­lion from Sh8.69 bil­lion pre­vi­ously.

“Last year (ended June 2015 ), the com­pany ben­e­fit­ted from in­vest­ment al­lowances fol­low­ing the com­ple­tion of Olka­ria 280MW plants,” man­ag­ing di­rec­tor Al­bert Mugo said in a state­ment.

The re­view period marked the first year the 280 megawatts of rel­a­tively cheaper geo­ther­mal power, com­mis- sioned be­tween July and De­cem­ber 2014, re­mained fully op­er­a­tional.

This helped grow its full-year rev­enues by 28.87 per cent to Sh38.61 bil­lion from Sh29.96 bil­lion the pub­licly traded com­pany posted 12 months ear­lier.

The earn­ings largely in­cluded Sh29.54 bil­lion from elec­tric­ity sales, which is 15 per cent more than Sh25.60 bil­lion the pre­vi­ous fis­cal year.

Rev­enue from sale of steam nearly dou­bled, ris­ing 85.91 per cent to Sh6.86 bil­lion, while other in­come streams raked in Sh2.21 bil­lion – nearly two-and-a-half-fold jump from Sh666 mil­lion the pre­vi­ous year.

“The new rev­enue streams show our strong com­mit­ment to di­ver­sify rev­enue sources and im­prove share­holder re­turns,” Mugo said.

The 1,623MW-ca­pac­ity com­pany cut ther­mal power sales by 24.74 per cent to 435 Gi­gaWatt hours – a mea­sure of (a bil­lion watts) units which is used by large power pro­duc­ers, with to­tal power sales ris­ing 11.27 per cent to 7,819 GWh.

/ENOS TECHE

KenGen MD Al­bert Mugo with fi­nance and ICT di­rec­tor John Mu­dany at the in­vestors brief­ing in Nairobi on Oc­to­ber 13 last year

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