KenGen’s Half Year Profits Skyrocket by 79%

KenGen just pulled off an earnings surprise that would make even the most seasoned investors do a double take. The power giant saw its after-tax profit soar by a jaw-dropping 79% to KSh 5.3 billion in the six months leading up to December 2024. That’s a major leap from the KSh 2.95 billion it raked in during the same period in 2023. But here’s where it gets interesting—despite the profit party, revenue actually dipped 3.6% to KSh 27.5 billion.

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Turns out, KenGen has been playing the efficiency game like a pro. While electricity sales ticked up 1.9% to 4,291 gigawatt hours, the real magic happened in cost-cutting. Operating expenses took a 13.7% nosedive to KSh 17.6 billion, thanks to some serious belt-tightening on plant maintenance and a laser focus on efficiency. Translation? Less spending, more profit—every CFO’s dream.

Speaking of financial wizardry, KenGen’s finance income surged by 30.5% to KSh 2.4 billion, while finance costs took a 23.8% haircut to KSh 1.1 billion. That’s a sign of sharper debt management and capital efficiency. Of course, with bigger profits comes a bigger tax bill—KenGen’s tax expenses shot up 42% to KSh 2.7 billion.

Meanwhile, the power demand surge continued, with national electricity generation growing 5.9%. Reimbursable fuel and water costs also edged up 9.1% to KSh 4.1 billion. But the real flex? The Kenyan government still holds a 70% stake in KenGen, making it a powerful player in the energy game. Oh, and let’s not forget—KenGen was the 6th most profitable stock on the Nairobi Securities Exchange in 2024 and ranked 3rd in dividend yields. Plus, in a major win for global recognition, the company joined the MSCI Frontier Markets Small Cap Index in August 2023.

Here’s what it means for you:

1. More electricity generation is a good sign, but rising fuel and water costs could impact bills. Improved efficiency may help keep electricity prices stable in the long run.
2. Improved efficiency means the company is well-managed, making it an attractive investment. Its inclusion in the MSCI Frontier Markets Small Cap Index boosts its international credibility.

Source; KenGen, Reuters.

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