KenGen Geothermal Plaza in Naivasha, Nakuru County. [Jonah Onyango, Standard]

A significant credit tax credit has lifted KenGen’s earnings, growing the listed power producer's profit by 157 per cent. The firm's profit after tax rose to Sh4.72 billion in the full year ended June 2022, up from Sh1.83 billion in 2021.

A tax credit following the company’s commissioning of the 86.3 megawatts Olkaria I unit 6 power plant saw its tax expense reduce to Sh3.22 billion from Sh13.47 billion in the year to June 2021.

This enabled the company to shrug off a spike in its operating costs as well as a significant increase in fuel costs that had reduced by half its profit before tax to Sh7.9 billion from Sh15.3 billion in 2021.

“Profit after tax rose by 157 per cent from Sh1.83 billion in the prior year to Sh4.72 billion for the period ending June 30. This is principally due to the capital allowances of the commissioning of the 86.3 MW Olkaria I Unit 6 geothermal power plant during the year that contributed to reduced income tax expense of Sh3.22 billion compared to Sh13.47 billion the prior year,” said KenGen in its financial results published yesterday.

The company has recommended a dividend of 20 cents per share, lower than last year’s 30 cents. The total dividend payout will amount to Sh1.32 billion if approved by shareholders.

Revenue increased by 7.5 per cent to Sh49.23 billion, up from Sh45.79 billion in the year to June 2021.

The company’s operating costs increased 21.3 per cent to Sh15.74 billion, which the firm attributed to higher operating costs in Ethiopia.