KenGen shareholders to receive Sh1.9b windfall
Kenya Electricity Generating Company (KenGen) shareholders are looking forward with hope as they prepare to receive Sh1.98 billion windfall as the firm’s quest for revenue diversification continues to bear fruit.
The dividend payout follows their approval of board’s recommendation for a first and final dividend payment of 30 cent per ordinary share of Sh2.50.
It comes at a time when most Kenyans have fallen on hard financial times as they deal with challenges brought about by Coronavirus (Covid-19) pandemic.
Managing Director and chief executive Rebecca Miano said the payment has been made possible by the company’s capacity expansion and diversification agenda, which had contributed to the results and growth achieved during the year.
To create more value for its stakeholders, KenGen has been focusing on diversification, a strategy that has seen it earn additional revenues.
The Nairobi Securities Exchange (NSE)- listed firm returned an after tax profit increment of Sh18.4 billion, up from Sh7.8 billion in the financial year ended June 2020.
It attributed the performance to a Sh8.1 billion reduction in corporate tax rate from 30 per cent to 25 per cent as per the government’s relief measures to support companies navigate through the Covid-19 crisis.
“The progress we have been able to make as an institution has mainly been driven by deliberate strategic decisions taking into account the prevailing operating environment, business sustainability, trends and market needs,” said Miano.
Miani was speaking during the company’s 68th virtual Annual General Meeting, which was held virtually.
The dividend payout for the year ended June 2020 is an increase from the Sh1.65 billion paid to the shareholders in 2019.
Miano said the company envisioned to add another 83.3MW of geothermal power to the national grid by the end of 2021, following the completion of Olkaria 1 Unit 6 geothermal power plant, adding that KenGen’s focus will be to deliver ongoing projects and pursue new ones in Kenya and the region.
As part of the diversification strategy, Miano revealed that KenGen will soon start manufacturing its own drilling detergents, which they are currently buying expensively.
“We have a whole array of activities in the diversification strategy that we will be communicating immediately an idea has been established to be feasible and ready for execution.”
State- owned entities
On whether KenGen was planning to offload some of its share in light of the recent conditions by International Monetary Fund on the management of State- owned entities, Energy Principal Secretary Joseph Njoroge said the government has not received any formal communication.
“We have not therefore worked on any analysis or consideration for such a scenario,” he added.
The Nairobi Securities Exchange has suggested to the government to sell its stakes in profit making parastatals to help plug budget deficits.
NSE, in a memorandum to the National Assembly Finance committee, suggests the sale of government stake in Kenya Pipeline Company, Kenya Airports Authority, and Kenya Ports Authority.
In the advisory to the committee chaired by Homa Bay Woman Rep Gladys Wanga, the Nairobi bourse also said substantive cash can also be raised from Safaricom, KCB Bank and KenGen.