Kenya Power and Lighting Company (KPLC) and Kenya Electricity Generating Company (KenGen) stocks surged on Tuesday, with gains of 49.7% and 31.1%, respectively. The rally came as both companies posted stellar financial results for the fiscal year ending in June 2024, surpassing market expectations and reinvigorating investor interest in Kenya’s energy sector.
Market Impact and Stock Performance
KPLC’s share price skyrocketed by 49.71% to close at KES 5.24, with 12.9 million shares traded, totaling a transaction value of KES 67.6 million. KenGen, meanwhile, saw a price increase of 31.11%, ending the session at KES 4.13 per share, with shares valued at KES 41.7 million changing hands.
The rapid appreciation added more than KES 3.4 billion to KPLC’s market cap, raising its valuation to KES 10.2 billion. KenGen’s market cap rose by KES 6.5 billion, reaching KES 27.2 billion. These increases solidified their positions among the top-performing stocks at the Nairobi Securities Exchange (NSE) for 2024.
Financial Highlights and Dividend Announcements
Kenya Power reported a remarkable profit recovery, with a net profit of KES 30.1 billion—a tenfold increase from the previous year’s KES 3.2 billion loss, marking a staggering 1042.1% improvement. This impressive turnaround was largely driven by a 21% increase in electricity sales. After a seven-year hiatus, Kenya Power has also declared a final dividend of KES 0.70 per share, much to the delight of long-term shareholders.
KenGen, meanwhile, reported a 35.5% jump in profits after tax to KES 6.8 billion, supported by strong revenues from hydroelectric power. In recognition of this growth, KenGen announced an increased dividend payout of KES 0.65 per share, more than double the KES 0.30 paid out in 2023.
Strong Book Values and Trading Volumes
Both companies witnessed heavy trading volumes during Tuesday’s session, with 12.9 million shares for KPLC and 10.1 million shares for KenGen. KPLC’s current book value stands at KES 44.75 per share, while KenGen’s is KES 42.17 per share—a testament to their robust asset positions.
Investors eagerly await the dividend payouts, with KPLC’s book closure date set for December 2, 2024, and payments expected around January 31, 2025, pending shareholder approval.
Record Year-to-Date Gains
Tuesday’s rally brought KPLC’s share price to levels last seen in 2019, reflecting a 269% year-to-date gain. KenGen has also had a stellar year, with a 105% year-to-date gain.
What This Means for the Kenyan Energy Sector
The financial successes of KPLC and KenGen reflect the resilience and potential of Kenya’s energy sector. Both companies have capitalized on strong demand for electricity, with KPLC benefiting from increased sales and KenGen from favorable hydroelectric production conditions. Their strong performance and renewed commitment to shareholder returns have boosted investor confidence and reaffirmed the sector’s role as a cornerstone of Kenya’s economic growth.
As the market responds to these impressive financial results, KPLC and KenGen are well-positioned to remain attractive investment choices, offering stability, growth potential, and increasingly competitive dividends for Kenyan and international investors alike.
