Genghis Capital - KenGen Company Plc (NSE: KEGN) FY19 1H20 Earnings Note

Report

Genghis Capital

Gerald Muriuki

KenGen Company Plc (NSE: KEGN) FY19 & 1H20 Earnings Note

KenGen Plc (NSE: KEGN) announced the delayed FY19 results (unaudited pending appointment of Auditor General) and 1H20 results. FY19 performance was fairly flat as expected (EPS KES 1.20, expected EPS KES 1.17). 1H20 performance was buoyant (EPS +98.1% y/y to KES 1.24, normalized EPS up 3.5% y/y to KES 0.65) mainly due to a tax credit of KES 1.9Bn following completion of Olkaria V power plant in November 2019. The power plant, operating for 2 months in 1H20, propelled electricity revenue up by 6.4% y/y. Operating expenses grew steadily in FY19 (6.0% y/y) but rose noticeably in 1H20 (+11.8% y/y) as employee expenses surged 19.0% y/y. FY19 dividend awaits audit of FY19 results.

At current market prices, the business remains a value pick for long term investors. We maintain our BUY rating at a fair value of KES 8.58.

02/03/2020 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.

See profile

Analysts

Gerald Muriuki

Other Reports from Genghis Capital

Gerald Muriuki

Gerald Muriuki

Genghis Cross-Asset Weekly Strategy - 8th February 2021

In this week's edition of the Weekly Cross-Asset Strategy Report, we give a recap of the equities, fixed income, currencies and derivatives markets' performance over the past week and our trading ideas for the coming week. Our Momentum, Income and Value equities portfolios continue to outperform the benchmark NSE 20 index. Performance of the Momentum and Income portfolios is ahead of all the benchmark indices including the Nairobi All Share Index (NASI) and Zamara Index. Genghis Trading Ideas for the week…Equities LONG-TERM BUY – EABL on recovery of financial performance Released financial r...

February 8, 2021 February 8, 2021 5 EN

Gerald Muriuki

Gerald Muriuki

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

East African Breweries Ltd (NSE: EABL) announced weak y/y performance as expected but a rebound h/h with net revenue down 3.1% y/y (+53.2% h/h) to KES 44.5Bn. The h/h recovery follows relaxation of pandemic-related restrictions in the July-Dec 2020 period with volumes (-5.0% y/y) and sales almost normalizing to pre-pandemic levels in 2019. In addition to the weak volumes, the business grappled with weaker currency, higher direct costs (gross margin at 43.5% from 47.7% in 1H20) and one-off tax provision which led to a faster drop in Profit Before Tax (PBT) of 45.0% y/y despite the resilient sal...

January 29, 2021 January 29, 2021 4 EN

Gerald Muriuki

Gerald Muriuki

KenGen Company Plc (NSE: KEGN) FY20 Earnings Note

KenGen Plc (NSE: KEGN) announced the delayed FY20 audited results. Performance was buoyant as expected with an EPS of KES 2.79 (+132.5% y/y) but normalized (adjusted for the KES 4.6Bn tax credit) EPS growth rate of 16.7% y/y to KES 1.40. The tax credit emanates from capital deduction allowances following completion of the 165MW Olkaria V power plant in November 2019. Electricity revenue backed by the power plant rose 13.4% y/y amidst steady growth in operating expenses (+3.0% y/y). As expected, full year dividend was maintained at the baseline KES 0.30 per share (+20.0% y/y increase) with book...

January 28, 2021 January 28, 2021 4 EN

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KenGen Company Plc (NSE: KEGN) FY19 & 1H20 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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