Power producer KenGen has delayed the payment of a Sh923 million dividend to the Treasury which is its major shareholder with a 70 percent stake.
The company on March 30 paid the other shareholders a total of Sh395.8 million after declaring a dividend of Sh0.2 per share or a total of Sh1.3 billion for the year ended June 2022.
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The Nairobi Securities Exchange-listed firm confirmed to Business Daily the delay. The power producer has continued with its history of delaying payments to the government, with the company not explaining the reasons for the trend.
On Monday, it paid the Treasury Sh1.38 billion, representing its share of the dividend declared for the previous financial year ended June 2021.
The company, in 2016, paid the government a dividend of Sh5.7 billion which had accrued over four years.
The payout generated a tax liability of Sh2.4 billion which KenGen paid in instalments. Others pay dividends to all shareholders on the same date.
The government that does a lot of business with the company seems accommodative of the trend.
“Many companies are going through hard times now and, therefore, for KenGen to post profits and pay dividends is a clear testament to the company’s good management processes,” Treasury Principal Secretary Chris Kiptoo said when receiving the dummy cheque for the Sh1.38 billion dividends on Monday.
The latest delay comes as the power producer closes another financial year at the end of this month.
The delays have helped to improve KenGen’s cash flow. The government is paid the declared dividend without interest despite the lateness.
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KenGen is in a capital-intensive business of building and maintaining power plants, with the government aiding its expansion through ways such as sourcing low-cost debt financing.
Its net profit for the half year ended December 2022 decreased marginally to Sh3.25 billion.
