Kenya Electricity Generating Company (KenGen) PLC has posted a 79 per cent rise in after-tax profit for the six months ending December 31, 2024, driven by aggressive cost-cutting and operational efficiencies.

The company’s net profit climbed to Sh5.30 billion from Sh2.96 billion in the previous period, yet revenue remained flat at Sh27.5 billion, raising questions about growth sustainability.

KenGen’s ability to slash expenses played a pivotal role in the profit surge, with operating costs dropping by 13.7 per cent to Sh17.67 billion from Sh20.47 billion.

This helped boost operating profit by 49.4 per cent, reaching Sh6.65 billion from Sh4.45 billion.

The company also benefited from improved capital management, with finance costs falling to Sh1.13 billion from Sh1.49 billion, while finance income grew to Sh2.45 billion from Sh1.87 billion, aided by better returns on cash investments and a stabilised Kenyan shilling.

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Eng. Peter Njenga, KenGen’s Managing Director and CEO, attributed the performance to disciplined financial management and a focus on efficiency, saying, “This performance is a testament to KenGen’s financial discipline and strategic focus on efficiency. We are optimizing our assets, streamlining operations, and leveraging our leadership in renewable energy to drive long-term value for our shareholders and the country.”

During the period, the company generated 4,291GWh of electricity, slightly higher than the 4,211GWh recorded in the previous half-year, with improved hydrology and fleet efficiency supporting the increase.

However, the lack of substantial revenue growth suggests that KenGen’s higher output did not translate into significantly higher sales.

Despite its profitability, the company’s Board chose not to declare an interim dividend, opting instead to reinvest earnings into future projects.

Under its long-term G2G 2034 Strategy, KenGen plans to add 194.4MW of new installed capacity across geothermal, hydro, and solar projects between 2025 and 2027.

Additionally, the company is looking to integrate 100MWh of battery energy storage to strengthen grid stability.

KenGen’s earnings per share (EPS) jumped 78 per cent to Sh0.80 from Sh0.45, underscoring its ability to generate shareholder value.

However, with revenue failing to grow in tandem with profits, the company may need to explore new revenue streams to maintain long-term momentum.

Njenga maintained that KenGen remains committed to ensuring a stable and reliable power supply.

"We are driving the future of energy in Kenya. Our commitment to operational excellence and innovation ensures that Kenyans will continue to benefit from reliable and affordable electricity for years to come," Njenga stated.

While cost efficiencies have given KenGen a strong financial footing, the company’s challenge going forward will be finding ways to grow its revenue base rather than relying on expense reductions to drive profitability.