Companies

KenGen cuts dividend even as profit jumps 157 percent

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“ICPAK advised KenGen not to deviate from International Accounting Standards.” Photo/FILE

Power producer KenGen has cut its dividend payout by a third even as its net profit surged 157 per cent to Sh4.7 billion in the year ended December.

The Nairobi Securities Exchange-listed firm declared a dividend of Sh0.2 per share or a total of Sh1.31 billion.

This is down 33 per cent compared to the payout of Sh0.3 per share amounting to an aggregate of Sh1.97 billion it made the year before.

The company did not give a reason for the dividend cut. It joins other State-controlled listed firms that have slashed cash distributions to shareholders despite improved earnings.

READ: KenGen opens new 83 megawatt plant at Olkaria

Kenya Re halved its payout last year to Sh0.1 per share or a total of Sh280 million while its net income rose to Sh2.96 billion from Sh2.94 billion in 2020.

Kenya Power is also yet to reinstate dividends paid on ordinary shares despite its net profit rising 2.3 times to Sh3.5 billion in the year that ended June.

The electricity distributor has, however, been paying dividends to holders of preference shares even when it made losses to fulfil contractual obligations to investors in the securities.

KenGen’s net profit jumped from Sh1.8 billion in the prior year. The earnings increase was aided by lower taxation. The company paid a tax of Sh3.2 billion in the review period, marking a big drop from Sh13.4 billion a year earlier.

The lower tax burden turned the company’s pre-tax profit of Sh7.9 billion into a net income of Sh4.7 billion, overtaking the prior year’s net earnings of Sh1.8 billion, which came after the higher tax was charged on the pre-tax earnings of Sh15.3 billion.

KenGen said it benefitted from tax cuts following investments in its power plants.

“This is principally due to the capital allowances on commissioning of the 86.3-megawatt Olkaria I Unit 6 geothermal power plant during the year that contributed to reduced income tax expense,” the company said in a statement yesterday.

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KenGen’s revenues grew 7.5 per cent to Sh49.2 billion in the review period, indicating increased electricity sales as the economy continues to recover from the impact of the Covid-19 pandemic.

The firm recorded a massive gain of Sh65.3 billion from the revaluation of its property, plant and equipment which lifted the value of its net assets to a new high of Sh275 billion.

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