Kenya Power and KenGen shares gained by 49.7 percent and 31 percent respectively on Tuesday after the companies announced sharp growth in profits and enhanced dividends for the full year to June 2024.
Kenya Power closed the day at Sh5.24 per share, its highest level in nearly six years, while KenGen closed at Sh4.13 per share, representing a high of almost three years.
KenGen posted a 35.5 percent growth in net profit to Sh6.79 billion in the review period, while Kenya Power’s net earnings jumped to Sh30.08 billion, reversing a net loss of Sh3.19 billion reported in the previous year.
The electricity distributor announced a dividend of Sh0.70 per share (Sh1.3 billion in total) after the performance turnaround, ending a six-year payout drought.
The dividend represented a return or yield of 20 percent based on the stock’s opening price of Sh3.50 per share at the Nairobi Securities Exchange (NSE), but due to the gain on the day, the yield fell to 13.4 percent.
KenGen increased its dividend per share to Sh0.65 from Sh0.30 in 2023, raising its total payout to Sh4.28 billion from Sh1.97 billion previously.
Both firms recorded higher than average trading activity on Tuesday, indicating that investors who bought their stocks at lower prices seen over the previous months were cashing in on the day’s capital gains.
Kenya Power moved 12.92 million shares, up from 1.79 million on Monday, with the traded turnover going up to Sh67.7 million from Sh6.3 million.
KenGen’s turnover meanwhile rose to Sh41.7 million from Sh1.14 million on Monday, following a rise in the number of shares traded to 10.1 million from 363,100.
The stocks were trading without the usual price movement cap of 10 percent either way due to the material announcements of their financials.
For Kenya Power, the higher profit was driven by a strengthening shilling and increased electricity sales due to increased connections and higher tariffs. The company made a gain of Sh7.8 billion on loans due to the revaluation of foreign currency-denominated loans.
Electricity sales rose 21 percent to Sh231.12 billion from Sh190.98 billion a year earlier, with the company adding 427,251 new connections in the period, bringing total customers to 9.7 million.
Consumption of electricity grew 2.76 percent to 19,516 Gigawatt hours (GWhs), amid increased demand mainly from large consumers (factories and industries).
KenGen also benefited from the stronger shilling, which reduced the burden of its debt denominated in hard currencies, with the positive movements captured as finance income which more than doubled to Sh4.2 billion from Sh1.6 billion.
The company sold 8,384 gigawatt-hours (GWhs) of electricity to Kenya Power—its sole customer— during the financial year, marking a growth of four percent from 8,027GWh it sold the utility in the year to June 2023.
The increased sales came despite the decommissioning of 133.5 megawatt (MW) of its fossil fuel-powered thermal plants in Muhoroni and Kipevu following the expiry of their Power Purchase Agreements (PPAs).
