Kenya Electricity Generating Company (KenGen) has reported a significant increase in its half-year net profit, rising by 79% to Ksh 5.3 billion for the six months ending December 2024. This marks a notable improvement from the Ksh 2.96 billion posted in the same period the previous year, demonstrating the impact of cost optimisation strategies and efficiency improvements in its operations.
Revenue Decline Despite Increased Electricity Supply
Despite the remarkable profit growth, KenGen recorded a slight decline in revenue, which fell by Ksh 1 billion to Ksh 27.5 billion. This comes even as the electricity supplied by the firm increased to 4,291 gigawatt hours (GWh) from 4,211 GWh in the previous period. The reduction in revenue suggests that other external factors, such as electricity pricing mechanisms or market dynamics, may have played a role in the earnings performance.
Cost Optimisation Key to Profit Growth
KenGen attributes the impressive profit increase to a 13.7% reduction in operating expenses, which fell to Ksh 17.67 billion. The company credits this reduction to strategic cost optimisation efforts and efficiency enhancements in its power generation plants. These initiatives have helped KenGen navigate the evolving energy landscape, which is increasingly focused on sustainability and green energy solutions.
Focus on Renewable Energy and Innovation
Looking ahead, KenGen is banking on expanding its renewable energy portfolio to drive future growth. The company has outlined ambitious plans to add 194.4 megawatts (MW) to the national grid through ongoing geothermal, solar, and hydropower projects. Additionally, it aims to introduce 200 megawatt-hours (MWh) of battery energy storage, which will enhance grid stability and support the integration of renewable energy sources.
KenGen’s strategy aligns with global and national efforts to transition toward sustainable energy solutions. By leveraging innovation and efficiency improvements, the company is positioning itself as a key player in Kenya’s renewable energy transformation.
No Interim Dividend for Shareholders
Despite the robust profit growth, KenGen has opted not to declare an interim dividend for shareholders. This decision suggests that the firm is prioritising reinvestment in expansion projects and infrastructure development to sustain long-term growth.
Rising Energy Demand
Kenya’s peak electricity demand has also seen an uptick, rising from 2,288 MW to 2,305 MW as of January 15, 2025. This growing demand underscores the need for continued investment in energy generation capacity to ensure a stable and reliable power supply.
KenGen’s latest financial results highlight the firm’s ability to adapt to changing market conditions through strategic cost management and a focus on renewable energy. As the energy sector continues to evolve, the company’s emphasis on innovation and sustainability will be crucial in maintaining its growth trajectory.
