NAIROBI: Electricity producer KenGen grew its profits after tax in the six months to December to Sh5.7 billion.

This was a 15 per cent increase from the Sh4.9 billion registered over a similar period the previous year, and was supported by increased power sales.

The firm’s profits were, however, weighed down by high operating and finance costs. Operating costs shot up to Sh8.7 billion, which was a 24 per cent increase over a similar period in 2014. Finance costs, which refer to the costs of servicing loans, also increased by about a quarter to Sh1.6 billion.

COMPLETED PROJECTS

The firm further had a tax expense in December 2015, unlike in the previous year when it had a tax credit. This is because in the last six months of the year, it enjoyed fewer tax allowances on completed projects than it did in 2014. Last year, it only got tax allowances on the 280MW Olkaria and 20.4MW Ngong Wind projects.

The company, which is 70 per cent State-owned, managed to grow income across most areas of focus, resulting in a 52 per cent overall rise in revenue. In the six months of its financial year, the firm generated Sh18.5 billion, up from Sh12.1 billion in 2014. Electricity revenue grew by 27 per cent to Sh14.8 billion.

Unit sales for hydro, geothermal, and wind power were all on the rise, with wind power emerging the star performer at 275 per cent growth. In 2014, KenGen sold 8 gigawatt-hours (GWh), which increased to 30GWh in 2015.

“Wind generation grew... following the completion of Ngong’s 20.4MW plants. Olkaria 280MW and Ngong Wind had full impact during this period,” said the firm’s managing director, Albert Mugo.

From geothermal generation, the firm got Sh5 billion, which was a 70 per cent increase when compared to the previous accounting period. This growth also meant that geothermal revenue overtook hydro power, which brought in Sh3.8 billion.

Unit sales of thermal power dropped by 110GWh compared to 330GWh sold in 2014. The company said this was a result of geothermal power being given priority dispatch to the national grid.

During the period under review, the Nairobi Securities Exchange-listed firm also received income from insurance compensation due to a 2014 fire incident that affected its Garissa power station and wellhead cooling towers.

Having invested in wellheads and drilling of additional wells to secure steam for three upcoming power plants in Olkaria, the firm grew its asset base by 4 per cent to Sh355 billion.

Going forward, the firm wants to implement additional projects in Olkaria, including Olkaria V and Olkaria VI, each with 140MW capacity, as well as an 80MW wind project in Meru.

The firm also hopes to float a Sh28 billion rights issue to raise additional funds to support its key projects by June 2016.