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