Kenya Electricity Generating Company Plc · NSEKE:KEGN
Kenya Electricity Generating — FY2018 Earnings Presentation
28 slides from Kenya Electricity Generating's earnings presentation, Oct 26, 2018
Slide 1: FY2018 Financial Results Presentation
Kenya Electricity Generating Company PLC FY2018 Financial Results Presentation Friday 26th October 2018 www.kengen.co.ke
Slide 2: 2017/18 Highlights
2017/18 Highlights Financial Year 2017/18 Highlights Energy Sold Revenue 7,989 GWhs KShs 45,290 Mn ▲5.7% ▲4.2% PBT Dividend KShs 11,746 Mn KShs 0.40 ▲2.5% 33% pay-out Full Year Results to 30 June 2018 2
Slide 3: Business Environment
Business Environment
Slide 4: Kenya's growth recovery has been swift
Kenya’s growth recovery has been swift Real GDP Growth, % Year-on-Year 6.3 6.3 6.3 6.1 5.7 5.7 5.7 5.5 5.5 5.4 5.3 4.8 4.7 4.7 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 4Q17 1 Q 1 8 2Q18 • Strong recovery from 2017’s headwinds, with Year-on-Year growth accelerating to 6.3% in 2Q18; • Projected GDP to average 6.
Slide 5: Kenyan Power Sector Institutional Framework
Kenyan Power Sector Institutional Framework Policy Direction Energy Regulatory Ministry of Energy Recommend License Commission Issue Policy Geothermal IPPs Enforce License Generation Development (31% Market Imports Requirement R Corporation share) E G PPA and Bulk Tariff Transmission Kenya Agreement
Slide 6: Energy Sector Key Programs
Energy Sector Key Programs …..Opportunity for KenGen to export power and expand customer base █ Electricity Regional Trade • 1,100km (500kV HVDC) Ethiopia- Kenya transmission line initiated • Kenya–Uganda (127km), Kenya-Tanzania (94km), 400kV planned transmission lines █ System reinforcement and Upg
Slide 7: Emerging Opportunities
Emerging Opportunities …..Improved political climate expected to upswing economic growth. Other notable economic drivers include; Require supporting Increased focus on Special Economic Zones Infrastructure - Power Manufacturing Full Year Results to 30 June 2018 7
Slide 8: Steady growth in Electricity Demand (MW)
Steady growth in Electricity Demand (MW) CAGR 6.2% 1,802 1,710 1,586 1,512 Power demand is projected to increase 1,468 driven by: 1,354 1,236 ● Economic activity ● Increased electricity access ● Implementation of Vision 2030 Projects ● Devolution – 47 counties 2012 2013 2014 2015 2016 2017 2018 Full
Slide 9: National Installed Capacity & Output Mix - 2018
National Installed Capacity & Output Mix - 2018 Installed Capacity – MW (%) Generation Output – GWh (%) 2,359 MW 10,702 GWhs 55 (2%) 219 (2%) Wind & Others 2,206 803 (21%) Thermal (34%) Thermal • Kenya - one of the lowest 1,205 cost developers of (23%) Thermal, 5,052 geothermal power in the 455 (47%
Slide 10: Our Strategic Score Card
Our Strategic Score Card
Slide 11: Our Strategic Focus
Our Strategic Focus 1 Capacity • Increase our capacity to remain relevant increase market player Value 2 creation • Provide adequate return to shareholders 3 Lower tariffs • Profitably supply cheaper renewable (green) electricity to the economy Full Year Results to 30 June 2018 11
Slide 12: KenGen Market Share - 2018
KenGen Market Share - 2018 … Our strategy is to continue being a major player in the power generation market in Kenya … Installed Capacity (MW) Generation Output (GWhs) IPPs IPPs 728 2,713 KenGen (31%) (25%) 1,631 (69%) KenGen 7,989 (75%) Full Year Results to 30 June 2018 12
Slide 13: KenGen Energy Mix – 2018 (GWhs)
KenGen Energy Mix – 2018 (GWhs) 89% of our generation output is renewable CAGR 5.8% IPPs IPPs Thermal, 888 Wind, 47 (1%) 7,822 7,989 7,556 (11%) 7,027 6,023 6,084 KenGen Hydro, 3,187 (40%) KenGen Geothermal, 3,867 (48%) 2013 2014 2015 2016 2017 2018 Full Year Results to 30 June 2018 13
Slide 14: Shared Prosperity and Social impact
Shared Prosperity and Social impact …,for sustainability and social license o Mirira Primary School Water and Rehabilitation of class rooms o 400,000 seedlings for reforestation o KenGen Benefitted 650+ secondary and university students o KenGen Employee Giver Initiative Full Year Results to 30 June
Slide 15: Financial Review
Financial Review
Slide 16: Net Operating Revenue
Net Operating Revenue KShs Millions Pass through Pass through revenue costs 159 45,290 9,623 ( 9,247 ) 35,508 ( 159 ) 35,884 6,222 Steam revenue 29,286 Electricity revenue Operating Fuel charges Water charges Total Revenue Fuel costs Water costs Revenue Net of Revenue Reimbursable costs Full Year Re
Slide 17: Electricity Revenue - Capacity
Electricity Revenue -Capacity Total of KShs 21,140 Million in Capacity Revenue % Availability Factors - 0.2% 1.2% -5.1% 94.1% 93.9% 90.2% 91.4% 85.0% 79.9% 2017 2018 2017 2018 2017 2018 Hydro Geothermal Thermal Revenue in Kshs Millions 2.2% -6.1% 10,931 11,177 7,583 7,120 -11.2%% 3,200 2,843 2017 20
Slide 18: Electricity Revenue - Energy
Electricity Revenue - Energy Total of KShs 8,146 Million in Energy Revenue Units sold (GWhs) 17.8% - 4.6% 3,867 3,283 3,339 3,187 1.9% -25.6% 871 888 63 47 2017 2018 2017 2018 2017 2018 2017 2018 Hydro Geothermal Thermal Wind Revenue in KShs Millions 14.8% 5,935 5,171 16.8% 7.1% -24.0%% 1,038 1,212
Slide 19: Financial Performance to 30 June 2018
Financial Performance to 30 June 2018 Summary Income Statement (KShs Millions) 30-Jun-17 30-Jun-18 %▲ Electricity Revenue 29,007 29,286 1.0% Better energy and Steam Steam Revenue 5,189 6,222 20% revenues owing to; Fuel Charge 9,069 9,623 6% • Completion of wellhead plants Water Charge 167 159 -5% •
Slide 20: Summary of Cash Flows
Summary of Cash Flows KShs Millions Operating Investing Financing 14,621 17,510 4,949 8,954 221 7,831 3,110 3,383 Opening Cash Capex Other New Debt repaid Net interest Closing Balance,1 Generated expenditure investing borrowings payments Balance,30 July 2017 by activities June 2018 operations Full Y
Slide 21: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION ….stable, largely unchanged 30 June 2017 30 June 2018 % KShs Millions Restated Movement ASSETS Property, Plant and Equipment 323,843 328,083 1% Other Non-current Assets 10,130 9,368 -8% Financial asset at fair value 13,117 10,490 -20% Current Assets 29,640 31,412 6% T
Slide 22: Debt Profile as at 30th June 2018
Debt Profile as at 30th June 2018 ……,affordable concessionary borrowings for growth Gross debt by source of funding Debt Maturity Profile (KShs Million) 4% GoK Guaranteed 12% 11,797 10,833 10,231 10,231 3% 32% GoK On-lent 8,954 DFIs Infrastructure Bond Commercial 49% 2018 2019 2020 2021 2022 Funding
Slide 23: Future Outlook
Future Outlook
Slide 24: Capacity Growth Focused On Renewables
Capacity Growth Focused On Renewables …To grow supply ahead of demand and retain market leadership Currently under implementation Olkaria V, Olkaria I AU 6, 476 MW 165 MW 83 MW Commissioning 2019 2021 Comprising of wind, solar and geothermal sources Full Year Results to 30 June 2018 24
Slide 25: Olkaria V Construction Progress at site
Olkaria V Construction Progress at site Olkaria V Geothermal plant, 165.4 MW on course for commissioning in July 2019 Clockwise from top left 1. Power House construction works 2. Electrical & Control Building Works 3. Steam field works 4. Generators arriving in Olkaria Full Year Results to 30 June 2
Slide 26: 2018/19 Key Initiatives
2018/19 Key Initiatives ….Our Promise Improve Shareholder value Operational Excellence Timely Project Delivery Protect our Revenue Innovative Partnerships Additional installed capacity Full Year Results to 30 June 2018 26
Slide 27: KenGen Recognition
KenGen Recognition Annual Wellness Champion Challenge - 2nd Runners Up - Wellness Winner Winner Champion 2018 Responsible Business Conduct State Corporations and SAGAs - IFRS Category 1st Runners Up Leadership & Governance SAGAs – Semi Autonomous Government Agencies Full Year Results to 30 June 2018
Slide 28: Thank You
THANK YOU Full Year Results to 30 June 2018 28
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