KenGen profit jumps 48pc to Sh5b as investments pay off

State-owned electricity generating firm KenGen has reported a 48 per cent growth in net profit for the year ended June 30, 2023 to Sh5.02 billion, up from Sh3.4 billion in a similar period last year.

At the same time, the Nairobi Securities Exchange-listed company has reported a steady 14 per cent growth in revenues, from Sh47.48 billion in 2022 to Sh53.96 billion this year, largely driven by investments in geothermal energy.

"In a landscape filled with both opportunities and challenges, the KenGen team has demonstrated remarkable resilience. We are proud to announce a profit after tax of Sh5.02 billion representing a 48 per cent growth," said Chief Executive Peter Njenga.

He attributed the performance to the enhanced operational efficiency of the company's geothermal fleet in Olkaria, Naivasha, further supported by a positive impact of the newly commissioned Olkaria I Additional Unit 6 geothermal power plant, which added 86 megawatts (MW) to the grid in July 2022.

"The commissioning of the Olkaria I AU 6 geothermal power plant pushed up our geothermal generation by 24 per cent. This contributed to an overall increase in electricity unit sales from 7,918GWh in 2022 to 8,027GWh," said Mr Njenga.

However, KenGen reported an increase in operating costs, which the CEO attributed to rising insurance and impairment costs.

But this was matched by growth in revenue, resulting in a pre-tax profit of Sh8.5 billion, which was a substantial improvement from Sh6.2 billion reported in the previous year.

Over the financial year to June, the company said it contributed over 66 per cent of the electricity consumed in the country.

"Our investments in geothermal energy ensured uninterrupted electricity supply, even in the face of challenges posed by a prolonged drought and reduced hydropower generation," said Mr Njenga. The company said it will increase its generating capacity by more than 154MW over the next two years.