NAIROBI, Kenya, Oct 16 – KenGen has announced a 48 percent increase in profit before tax to Sh4.5 billion for the financial year ending June 2009.
Managing Director Eddy Njoroge attributed the performance to the increased earnings following the implementation of the new Power Purchase Agreement (PPA) with Kenya Power Lighting Company (KPLC) which had a higher average yield of Sh2.24 per kilowatt hour(kWh) compared to Sh2.36/kWh last year.
“Hydrology this year was the worst we had in the last 75 years and as a result the unit sent out declined to 4.3 billion kilowatt hours compared to 4.9billion last year. In spite of this, earnings were impacted favourably by the implementation of the PPA,” he said.
In a statement to the Nairobi Stock Exchange, Mr Njoroge said they have also changed their policy on the treatment of foreign currency translations to recognise them in the statement of changes on equities.
The company is cushioned by the PPA against foreign exchange fluctuations arising from the translation (foreign currency denominated) borrowings in the PPA.
The Board of Directors have recommended a dividend payout of Sh0.50 cents per share although the shareholders’ approval will be sought in the December 10 Annual General Meeting.
The improved performance comes a few weeks before the commencement of trading of the Sh15 billion Public Infrastructure Bond Offer (PIBO) at the Nairobi Stock Exchange.
Finances raised from this offer are expected to help increase the firm’s generation capacity by 500 Megawatts (MW) by 2013 and another 1500 MW by 2018.
At the same time, Total Kenya has announced a 73 percent drop in its net profit to Sh228 million for the nine months ended September 2009.
Managing Director Felix Majekodunmi said the results were due to reduced sales volumes and effects of low margins in the first quarter occasioned by the sharp decline in international crude oil prices recorded last year.
This also led to a 44 percent decline in turnover to Sh23.9 billion compared to last year.
“In addition, supplies to upcountry regions continue to be affected by the pipeline pumping capacity limitations leading to occasional stock-outs and loss of sales,” said the MD.
Despite the decline, Mr Majekodunmi explained that this was an improvement from the negative results recorded in the first quarter of 2009.
The outlook for the fourth quarter is projected to be positive depending on the stability of international crude price and economic performance of the country.