Genghis Capital - KenGen Company Ltd (NSE: KEGN) FY18 Earnings Note

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Genghis Capital

Gerald Muriuki

EUR 25.64 For Business Accounts Only

KenGen Company Ltd (NSE: KEGN) FY18 Earnings Note

KenGen Ltd (NSE: KEGN) released better than expected FY18 revenue and net earnings. FY18 revenue grew 4.3% y/y against our expected growth of 2.5% buoyed by faster growth in steam revenue (19.9% y/y). EPS fell 12.4% y/y to KES 1.20 against expected KES 1.16, mainly due to lower tax expense in FY17 on account of tax incentives (investment deductions allowances) on new geothermal wellhead plants in FY17. The 2.5% y/y growth in earnings before tax was due to a 150.7% y/y increase in finance income from investments in government securities and fixed deposits.

Against expectations, a dividend of KES 0.40 per share was declared, payable to shareholders on register by 7^th December 218.

On the back of the solid results, we maintain our BUY recommendation at a target price of KES 9.84.

30/10/2018 5 EN

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Gerald Muriuki

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KenGen Company Ltd (NSE: KEGN) FY18 Earnings Note

Genghis Cross-Asset Weekly Strategy - 8th February 2021

East African Breweries Ltd (NSE: EABL) 1H21 Earnings Note

KenGen Company Plc (NSE: KEGN) FY20 Earnings Note

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