KEN GEN'S SLIGHTLY SHIFTING SANDS

From the figures released by the CEO of Kenya Electricity Generating Co plc, Mrs Rebecca Miano recently for the full year to June 2018, the sands shifted slightly under the company within the period.

It takes some closer scrutiny to notice it but what is clear was that profit margin within the year eased to 24.2% from 25.1%.

Gross direct revenue had increased by 11.2% to Ksh 45,289.7m from Ksh43,431.9m in 2017 year leading to total income growth of 6.23% to Ksh 48,505.9m from Ksh 45,661.6m.

There was 150.6% increase in finance income to Ksh 3,341.4m, so the reduced growth in total income came more from huge drops in Other income, down 50.3% to Ksh 274.8m and loss of Ksh 1049.9m from activities Ken Gen netted Ksh 343.3m income in 2017.

It was as a result of these drops, that net operating revenue declined by 0.6% to Ksh 35,108.5m before the strong growth in finance income came in very handy.

But only Other Expenses and finance cost grew less than the total income growth amongst overheads. Staff cost rose by 6.56% to Ksh 6,132.3m; steam costs increased by 27% to Ksh 3,549.4m while plant operations and maintenance cost rose by 7.37% to Ksh 1669.1m.

Other expenses declined by 11.7% to Ksh 2,168.1m and finance cost dropped by 11.1% to Ksh 3341.4m but these were not enough to check profit before tax from growing by only 2.48% to Ksh 11,745.5m leading to the reduced profit margin.

Ken Gen says it could have been worse. One, because half of the year fell into Kenya's challenging election 2017; because drought early in the financial year dropped water levels to dangerous levels and because later in the year, heavy rainfall restored water levels and Ken Ben's hydro power generation.

It could also have been worse, says the CEO but for strategic shift of focus hitherto to geothermal power generation from hydro and thermal power. This helped to grow energy sales by 6% to 7989 GWH from 7556 GWH.

Meaning, the shifting sand is rather temporary and year 2019 beckons with hope for a better year-end.

That is possible partly because Ken Gen financial position remains strong and by June 2018, its working capital surplus was Ksh 10,533m compared to Ksh 9,546m a year earlier.

KEN GEN PLC Full year. Kshm
                               2018.               2017
Electricity inc.    29,285.7.       29,006.6
Steam revenue.   6,222.1.          5,189.1
Fuel charge.         9,622.7.          9,069.4
Water charge.         159.2.             166.8
Other income          274.8.             553.1
Other gains.        (1,049.9).            343.3
Financial income 3,341.4.           1333.3
Total income.     48,905.9.       45,661.6
Staff cost              6,132.3.         5754.7
Steam costs.        3,549.4.         2,795.8
Plant operations. 1,669.1.         1,554.5
Other expenses    2,168.1.         2,454.1
Finance cost         3,037.6.         3417.4
Profit before tax 11,745.9.      11,461.2
Profit margin %.         24.2.            25.1

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