Zeddy Sambu
14 December 2009
KenGen says it will turn to technology in its annual general meetings to cut costs on printing and postage.
The power generator's over 250,000 shareholders have pushed it to identify a mix of technology and employ cost-cutting measures during the yearly meetings, managing director Eddy Njoroge said last week.
Mr Njoroge said future meetings will heavily rely on technology to deliver essential communication such as annual reports and dividend payments to reduce spending on printing and postage.
At Thursday's meeting, the company provided the usual free lunch, water, transport and bags to the shareholders in attendance, but did not provide branded give-aways that have become synonymous with previous AGMs.
This time, the company also printed 10, 000 booklets down from the 250, 000.
"We have saved Sh60 million through reduced printing and postage of the fewer 10, 000 copies. In future, we will post the annual report on line and offer it on digital disks, only mailing the report to those who ask for it.
We will also regularly publish the results in the newspapers to further cut costs," Mr Njoroge, told reporters soon after presiding over the yearly meeting at the Moi International Sports Centre gymnasium in Kasarani.
KenGen has previously spent more than Sh25 million on annual reports alone, using a further Sh17 million on postage to its 250,000 shareholders.
Additional funds have also been used to provide the bulk of retail investors with the giveaways.
Now, the company says it has amended the rules of engagement with their shareholders to enable the change over in the dealings with the owners, that is majority owned by the Treasury.
The private share holders own 30 per cent of the company.
By cutting spending on non-essential elements, Kengen hopes to use the proceeds to accelerate completion of the planned projects.
The public power generator plans to complete five priority projects--Kipevu III, Sangoro hydro electric power, Tana redevelopment as well as Kindaruma Unit, Mombasa coal plant and help address the growing demand for electricity during 2010.
KenGen, which plans to increase generation capacity by 500MW by 2013 and another 1 500MW by 2018, with focus on geothermal generation is expected to partly fund the projects mainly by retaining earnings generated during the period.
"In the coming year, we are set to invest over Sh25 billion for our capital projects . To sustain the momentum, we need over Sh100 billion in the next five years for our growth programme," said Mr Njoroge. The firm rewarded shareholders with dividends of Sh0.50 per ordinary share to be paid out by February.
On Sunday, their concerns ranged from the impending second sale, possible rights issue as well as the current "low"' performance of the share price that is currently trading at Sh11.55 at the NSE.
In the year to June 30, KenGen posted a remarkable performance helped by a new power deal with its sole customer--the Kenya Power and Lighting Company, that cushioned it against foreign exchange fluctuations arising from translation of foreign currency denominated borrowings in the PPA.
The company also changed the policy on the treatment of foreign currency translations to recognise them in the statement of changes in equity.
For the period under review, KenGen defied the acute drought to post a pre tax profit of Sh4.6 billion compared to Sh3.1 billion previously.
On Wednesday, a Korean firm- Daewoo International Corporation, announced it had won the $1.3 billion (Sh10.4 billion) to build a coal-powered plant in Mombasa, one of KenGen's key projects.
Officials of Daewoo told newswire agencies in Seoul that they plan to build the plant with KenGen after final discussions .
In Nairobi, Mr Njoroge said the public power firm plans to enter into a joint venture partnership with the Seoul-based company, should the public procurement watchdog--the Public Procurement Oversight Authority (PPOA) clears the award process.
"We have procured the services of Daewoo as our joint venture partner to develop 600MW coal plant expected to be commissioned within five years," said Njoroge.