Glad KenGen made a profit but the major boost (vs last year) seems to be from the savings in interest payments [GoK's loan converted to equity] and interest income from cash collected from the Rights Issue.

The interest paid would have been much higher is not for the Loan to Equity conversion.

Taxation: Tax Credits [while welcome] also mean they will run out i.e. the PAT boost thanks to a much lower 25%) tax rate vs last year accounts for a huge portion of the increase in PAT.

There's a lot of competition (supply) for energy which means KenGen has to be a low-cost supplier.
LTWP is ready to supply KPLC but for KETRACO's delay.
Phase 1 of Amu (coal) could be ready in 5-8 years depending on the politics.

Huge cash-heavy projects on the cards. It is not investable for me at the moment but I will keep a look-out if the corporate governance is good.

Interview of the acting MD & CEO with Aly Khan Satchu
https://youtu.be/mY_Rf1Vcmug

KENGEN TO LAUNCH $300MN LOAN WITH WORLD BANK BANKING

Kenya's largest power producer Kenya Electricity Generating Company (KENGEN)
is looking to raise $300mn in the loan market,which the world bank is providing
a $180mn guarantee for.
The state-owned company has sent out a request for proposal to international banks for financing,according to a banker close to the deal.
The funds will be used to restructure a portion of KENGEN's existing loans,according to a spokesperson from the World Bank.

Rebecca Miano confirmed as MD& CEO

http://www.businessdaily...5526-qjsxfbz/index.html

Electricity producer Kenya Electricity Generating Company (KenGen) is optimistic of a reprieve from the taxman who is demanding Sh2.43 billion tax as well as penalties and interest.
The Nairobi Securities Exchange-listed firm attracted the compensation tax after paying dividend arrears to the Treasury last year.
KenGen paid dividend of Sh6.164 billion, according to an audit report by the Auditor General on the company for the year ended June 2017. It has been negotiating for a waiver of penalty and interest by the Kenya Revenue Authority in talks that started a year ago.

The accounts & finance manager(s), really effed up.

http://www.businessdaily...55644-byxw17/index.html

http://www.businessdaily...642-13a1flyz/index.html

http://emmanuellaalia.bl...4/compensating-tax.html

A painful lesson. Education muhimu.

In summary Kengen should not distribute the tax incentives it receives. Expect a dividends drought every time they do a new power plant...as they say on nairobi streets wacha niende hivi nacome

Not necessarily when hydrology is good they may dish out some dividends.
For the past two financial years geothermal has been their saviour

Compensation tax of Ksh 2.431 was paid in 2016 and not in 2017. Business daily has it twisted

Below Excerpt from 2016 Financia results:

"Compensating tax of Kshs.2,431 million is a provision that arose from payment of dividends of Kshs.5,735 million
paid to the government during the year
in
accordance with section 7A(5) of the Income Tax Act Cap 470"

http://www.businessdaily...5526-qjsxfbz/index.html

"KenGen paid dividend of Sh6.164 billion, according to an audit report by the Auditor General on the company for the year ended June 2017. It has been negotiating for a waiver of penalty and interest by the Kenya Revenue Authority in talks that started a year ago."


Point to Ponder: if KRA forgives KenGen's tax will it also forgive Nakumatt?

The Kenya power annual report has interesting stats on the regional maximum power demand Nairobi dropped from 842Mw to 831Mw demand is increasing in Coast and western

Overall power demand increase has dropped from a high 9.5% in 2012/2013 to 4.4%