Electricity producer KenGen half year net earnings to December 2021 came flat at Kes5.1 billion on higher expenses.
The operating costs were higher by eight percent in the half closing at Kes14.1 billion from Kes13.1 billion at a comparable period in 2020.
The company attributed the costs to increased business activities in Ethiopia, repairs and maintenance as well as a surge in steam costs due to uptick in dispatch from Olkaria I AU and V geothermal plants.
The electricity generator revenues nevertheless grew by 14 percent to Kes24.8 billion from Kes21.8 billion on account of revenue diversification.
“This growth is mainly attributed to higher revenue receipts from drilling consultancy and operations outside Kenya,” the company explained.
During the six-month period under focus, KenGen completed the drilling of the deepest geothermal well in Ethiopia that struck a depth of 3,000 meters, surpassing the targeted 2,750 meters.
The project was the second of eight geothermal wells that KenGen is contracted to drill for the state-owned electricity producer Ethiopia Electric Power Company.
“Our performance for the six-months ended 31st December 2021 remained stable supported by increased income from revenue diversification initiatives and overall growth in electricity demand,” the company said.
Reduction in loan balances saw KenGen lower its finance costs by 27 percent to Kes897 million from Kes1.2 billion by December 2020.
KenGen plans to commission Olkaria I additional unit 6 geothermal power plant this year, a move that will boost the power producer’s renewable energy portfolio by 83.4MW
“We remain steadfast on the path of growth and operational excellence for business sustainability. In the same way, we support the ongoing reforms in the energy sector towards competitively-priced energy for all,” company CEO Rebecca Miano noted.
The board of KenGen has not recommended the payment of an interim dividend for the period.