Kenya Electricity Generating Company (KenGen) experienced a substantial surge in its share price, climbing 7.5 per cent on the back of a robust financial performance, and a 50 per cent increase in annual dividends.

The company’s shares were valued at Sh2.30 on the day before the announcement of impressive financial results for the fiscal year ending in June 2023, marking a promising uptick for its investors.

Despite this recent rally, KenGen’s stock has faced a challenging year thus far, enduring a 32 per cent decline, as per the data provided by the Financial Times.

Among the standout figures in the books of account was a notable 48 per cent growth in profit after tax, with KenGen reporting an impressive Sh5 billion net profit, to reflect the company’s ability to effectively navigate the complex energy market and capitalize on available opportunities.

During that period, KenGen realized a substantial rise in its revenues, with a growth of 13.7 per cent, bringing the total revenue for the fiscal year to an impressive Sh53 billion.

This increase can be attributed to the company’s commitment to expanding its energy generation and distribution capabilities, as well as its focus on clean energy solutions, which are increasingly in demand in today’s environmentally conscious world.

A diversification strategy allowed KenGen to benefit from government to government initiatives that saw it clinch drilling contracts in the region.  The company’s results highlight it as one of the undervalued stocks on the bourse that are victims of general global economic uncertainty as the government mulls privatisation of some of the firms it owns.

The 50 percent increase in annual dividends is a testament to KenGen’s commitment to rewarding its shareholders for their continued support and investment. Shareholders are set to benefit significantly from the company’s strong financial performance.

Despite the recent positive developments, it is worth noting that KenGen’s shares have faced challenges throughout the year suffering from general foreign investor flight.  Nonetheless, the company’s recent financial results and strategic initiatives position it favorably for potential future growth and sustained recovery in its share price.

Investors will be closely monitoring KenGen’s performance, as the energy company continues to navigate a dynamic market landscape while striving to meet Kenya’s growing energy needs.