KEN GEN ENDS 2017 YEAR LOOKING AHEAD

Kenya Electricity Generating Company (Ken Gen) ended the full year to June 2017 with eyes fixed more on the near future, not the moment captured by full year figures released this week.

There was good reason: Its three core revenue streams flowed below 2016 levels and to make matters worse, operating expenses refused to take a humbling bow.

Core revenue had dropped by 8.21% to Kes 35440m as other income decreased by 60.1% to Kes 882m; income from steam operations declined by 24.8% to Kes 5189m and electricity revenue eased slightly to Kes 29369m from Kes 29544m.

Then of course, in spite of these drops, operating expenses rose by 8.3% to Kes 9691m and finance costs increased by 9.1% to Kes 3417m.

However, Ken Gen found two tickets with which to cushion all these: 123.4% growth in interest income to Kes 1242m and 11.7% decline in steam associated costs to Kes2796m.

Hence, instead of a drop, Ken Gen reported 2.4% increase in profit before tax to Kes 11534m in spite of the revenue downswing.

Not fantastic but not bad too for a company that raised new money within the year through rights and was yet to deploy chunk of this in projects in the pipeline hence more interest income.

It was thus easier to keep eyes on the future, says acting CEO Mrs Rebecca Miano because new capacities are in pipeline, year 2017 was affected by drought and evacuation constraints and the simple fact that existing capacity, including 10MW added, was yet to be fully tapped.

Besides, converting some loans into equity during the rights issue also affected forex related losses.

KEN GEN KesM, Full year.
                             2017.            2016
Total income   36682.          39166
Electricity rev. 29369.           29544
Steam.               5189.              6856
Other income      882.              2210
Operating cost 9691.               8948
Steam cost       2796.               3167
Interest income 1242.                556
Finance costs    3417.              3132
Profit before tax 11534.         11264
Profit margin %.    31.4.             29.2
Working capital   9546.           3726


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