Electricity producer Kenya Electricity Generating Company (KenGen) #KEGN has reported a net profit increase of 34.31 per cent in the year ended June but declined to pay shareholders dividend, citing cash flow needs to fund capital-intensive projects.
The Nairobi Securities Exchange-listed firm’s net profit increased to Sh9.05 billion in the review period boosted by increased interest income, up from Sh6.74 billion recorded a year earlier.
Acting managing director Rebecca Miano told an investor briefing the performance came against the backdrop of severe drought which affected KenGen’s hydro generation and power evacuation constraints that reduced geothermal dispatch and impacted revenues.
“Interest income registered a growth of 123 per cent mainly attributable to earnings from investment of funds raised during the rights issue awaiting full implementation of earmarked projects,” said Ms Miano yesterday.
“The board of directors does not recommend payment of a dividend due to investment in the projects and cash flow needs.”
The company, which sells its units to Kenya Power #ticker:KPLC, said its electricity revenue remained nearly flat at Sh29.36 billion in the review period this year from Sh29.5 billion a year earlier.
“The power evacuation constraints have since been resolved with the completion of the Olkaria-Suswa line, which has enabled more electricity to be dispatched from the Olkaria plants, thus mitigating the impact of low hydro generation due to drought,” she said.