KenGen profit falls 94pc on high taxes

KenGen’s #ticker:KEGN net profit dropped 93.5 percent in the year ended June on what the power producer blamed on higher taxation.

The company reported net earnings of Sh1.2 billion in the review period, down from Sh18.4 billion a year earlier.

It incurred an income tax expense of Sh13.5 billion in the period, having booked an income tax credit of Sh4.5 billion the previous year.

“The corporate tax rate was reduced from 30 percent to 25 percent in 2020 but reversed back to 30 percent in 2021 resulting in a tax expense of Sh8.7 billion on deferred tax compared with a credit of Sh8.1 billion in the previous year,” the company said in a statement.

“This contributed significantly to the high tax expense of Sh13.5 billion compared to a previous year tax credit of Sh4.5 billion.”

KenGen has proposed a dividend of Sh0.3 per share or a total of Sh1.9 billion, the same as for the prior year.

Its sales rose four percent to Sh45.9 billion, contributing to pre-tax earnings increasing seven percent to Sh14.7 billion.

The company did not say how much it is owed by Kenya Power #ticker:KPLC which has defaulted on several suppliers. KenGen’s current assets, largely made up of receivables from the electricity distributor, rose to Sh43.8 billion from Sh34 billion.