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KenGen reports a 5%y/y drop in full year EPS

The Kenya Electricity Generating Company (KenGen) has released its full year results for the period ended 30th June 2010. For the period, the company earned Kshs.0.89 per share compared to Kshs.0.94 per share it earned same period 2009, implying a downside of 5.32%y/y.
The company’s pretax profit retreated by 47.01%y/y to Kshs.2.4bn down from Kshs.4.56bn in 2009. However, its Total comprehensive income rose 70.84%y/y to Kshs.3.32bn up from Kshs.1.94bn in 2009 boosted by investments in Treasury instruments. Net Income edged down marginally by 5.48% to Kshs.1.96bn down from Kshs.2.07bn the previous year due to a lower tax rate of 18.91% in 2010 compared to 54.54% in 2009. From the company’s financials, it had an unusually higher figure for items not deductable for tax in 2009 compared to 2010 that served to raise the tax-deductable income.
Overally, KenGen’s financial results showed a slight stagnation and according to the company, this was down to severe drought leading to poor inflows that significantly impacted its hydro generation capacity. Under the new Power Purchase Agreement, revenues are based on take or pay capacity. Due to poor inflows, the company was unable to meet this threshold and was consequently adjusted by KPLC by a total of Kshs.1.25 Bn.
The Board of Directors recommended a final dividend of Kshs. 0.50 per share.