KenGen posts Sh5b half-year profit on relief measures cut

KenGen head office in Nairobi. [Boniface Okendo, Standard]

The Kenya Electricity Generating Company (KenGen) has reported a net profit of Sh5.12 billion for the six months ended December 2021.

This is a slight increase from Sh5.06 billion posted over a similar half in 2020. The marginal increase was attributed to the withdrawal of relief measures that the government had handed Kenyan businesses to enable them to cope with the effects of Covid-19 in 2020.

The firm enjoyed the 25 per cent corporate tax rate during the first half of the 2020/21 financial year but had to pay the full rate of 30 per cent over the first half of the 2021/22 financial year.

It said it paid a higher income tax in 2021 compared to the previous half when it got a tax credit following completion of Olkaria V that had the effect of significantly lowering its tax burden then.

“Income tax expense increased by 32 per cent to Sh2.34 billion from Sh1.82 billion in December 2020, reflecting the impact of corporate tax reversal from 25 per cent to 30 per cent, and Olkaria V capital allowances, which had resulted in a lower tax effective tax rate of 26 per cent in 2020,” said the firm in a statement signed by its CEO Rebecca Miano (pictured).

“Consequently, profit after tax rose from Sh5.06 billion in 2020 to Sh5.12 billion for the six months ended December 31, 2021.” Revenues increased 14 per cent to Sh24.79 billion in 2021 compared to Sh21.8 billion over the previous half.

It attributed the growth to a continued diversification of its offering as it seeks to reduce reliance on sale electricity to Kenya Power. It bagged contracts to drill geothermal wells in Ethiopia and Djibouti.

Its operating costs increased eight per cent to Sh14.13 billion from Sh13.09 billion, which it said was due to increased business activities including operations in Ethiopia. The company plans to commission an 83.4-megawatt geothermal plant this year.