The Kenya Pipeline Company (KPC) has declared an interim dividend payment of Ksh. 5 billion to the National Treasury for the financial year ending in June 2023.
This dividend follows a 21% increase in KPC’s profitability, reaching Ksh.7.6 billion during the 2022/2023 financial year, compared to Ksh.6.3 billion in the previous year.
The announcement of the interim dividend took place during a cheque handover ceremony at KPC’s headquarters.
National Treasury Cabinet Secretary Prof. Njuguna Ndung’u praised the Ministry of Energy and Petroleum for its role in overseeing the sector.
He said KPC, among all state parastatals, is leading by paying out the highest dividend.
“KPC continues to deliver positive results on an annual basis and remains a self-funded corporation that delivers a return on investment to its shareholders who are the people of Kenya. The Ksh.5 billion in interim dividends is the highest dividend paid by any state corporation.” Said National Treasury Cabinet Secretary Prof. Njuguna Ndung’u.
Energy and Petroleum Cabinet Secretary Davis Chirchir also commended KPC for its consistent positive returns to taxpayers.
He encouraged other state corporations to adopt similar strategies to give back to taxpayers.
Recently, KPC completed the full handover of the Kenya Petroleum Refineries Limited (KPRL).
This strategic move aims to enhance KPC’s petroleum supply chain infrastructure, resulting in improved supply security and cost efficiency by reducing demurrage costs.
Energy and Petroleum Cabinet Secretary Davis Chirchir challenged KPC to leverage its existing infrastructure to enhance efficiencies within the petroleum industry. The goal is to generate additional cost savings that can be passed on to consumers.
KPC plays a crucial role in providing access to petroleum products for neighboring countries across East Africa, including Uganda, Rwanda, Eastern DRC, Burundi, South Sudan, and Northern Tanzania.
The recently launched Kisumu Oil Jetty (KOJ) solidifies Kenya’s strategic position by offering an efficient, safe, and reliable mode of transporting petroleum products to neighboring countries.
Also Read: KPC Feted for 4th Year in a Row at DIAR Awards
KPC Board Chairman Faith Bett-Boinett said the Ksh.5 billion interim dividends, declared via an AGM declaration two weeks ago, reflect KPC’s strong business fundamentals.
The company pays from a position of strength, supported by sound strategic decisions and operational efficiencies, including cost-cutting measures.
KPC has taken deliberate steps to contain costs, resulting in a 5% savings equivalent to Ksh.1.8 billion.
These measures include a Ksh.4 billion advance payment toward a syndicated loan facility and resolving legacy contractual issues, which have strengthened KPC’s cash position.
highlighted the company’s intention to diversify its product offerings by leveraging its expertise in the oil and gas sector and utilizing its existing infrastructure .
“Apart from growing our normal transportation and storage of petroleum products, we are looking at growing other business streams such as our Fiber Optic Cable (FOC), Morendat Institute of Oil and Gas (MIOG) and investments in Liquefied Petroleum Products (LPG) in the next Financial Year (2023/2024),” said KPC Managing Director Joe Sang.
KPC has a dividend policy of paying 30% of its profit after tax (P.A.T) but has consistently surpassed the threshold while maintaining operations and complying to the prescribed lending/ loan covenant ratios.
Cumulatively, KPC has paid Ksh.46 billion in dividends to the government over the last six years.
