NAIROBI, Kenya – Kenya Pipeline Company (KPC) has reported a 13.1 per cent rise in net profit to Sh11.58 billion for the financial year ended June 2026, its first annual earnings announcement since listing on the Nairobi Securities Exchange (NSE) in March.
The state-backed petroleum infrastructure company also proposed a Sh5.90 billion dividend, equivalent to approximately Sh0.32 per share, as higher petroleum volumes pushed annual revenue to a record Sh42.98 billion.
Audited results released on Wednesday showed revenue increased by 8.8 per cent from Sh39.50 billion in the previous financial year, reflecting stronger demand for petroleum transportation services.
The proposed dividend is subject to shareholder approval and represents approximately 50.9 per cent of annual net profit, broadly in line with the 50 per cent earnings payout policy outlined in the company’s initial public offering (IPO) memorandum.
Fuel Volumes Drive Revenue Growth
KPC’s transport revenue, its principal source of income, rose by 8.4 per cent to Sh41.82 billion, accounting for 97.3 per cent of total revenue.
The company attributed the growth partly to a 7 per cent increase in local and transit petroleum volumes.
It handled 10.61 billion litres of petroleum products during the year, with Kenya accounting for 49 per cent of throughput. Uganda contributed 27 per cent, eastern Democratic Republic of Congo accounted for 9 per cent, while aviation hydrant operations represented 8 per cent, according to the company’s investor presentation.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 10.7 per cent to Sh24.95 billion, while profit before tax rose by 8.4 per cent to Sh17.54 billion.
The net profit margin improved to 26.9 per cent from 25.9 per cent a year earlier.
However, direct costs increased by 8.5 per cent, partly due to higher electricity and maintenance expenses.
Cash Flow Improves As Borrowings Fall
KPC recorded stronger cash generation during the year, with operating cash flow rising by 34.3 per cent to Sh17.39 billion.
Cash balances at the end of the financial year increased by 84.4 per cent to Sh20.54 billion, while investing cash outflows rose from Sh2.52 billion to Sh4.48 billion as the company increased infrastructure spending.
Borrowings fell by 83.4 per cent to Sh442.86 million following debt repayments.
The company’s historical financial series shows revenue has grown more than sixfold since the 2003 financial year, although KPC recorded a loss of Sh1.74 billion in the 2021 financial year.
Shareholders Set For Sh5.9bn Dividend
The board recommended a final dividend of Sh5.90 billion, matching the amount distributed for the 2025 financial year.
The proposed payout is equivalent to approximately Sh0.32 per share and will require shareholder approval. The shareholder record date has been set for November 30, 2026.
The distribution follows KPC’s March listing on the NSE, which came after the government sold a 65 per cent stake through an IPO priced at Sh9 per share.
The share sale raised Sh106.31 billion for the National Treasury. The government retained a 35 per cent stake, while Uganda’s government held 21.22 per cent, according to KPC’s October investor briefing.
Acting Managing Director Pius Mwendwa attributed the improved financial performance to stronger collections, fuel availability and operational efficiency.
KPC Targets Sh68bn Revenue By 2030
KPC expects annual revenue to reach Sh68 billion by the 2030 financial year, a target that would require compound annual growth of approximately 12 per cent from the Sh42.98 billion recorded in FY2026.
To support expansion, Chairperson Faith Bett-Boinett outlined proposals to develop a petroleum trading hub at the Kipevu facilities of KPC subsidiary Kenya Petroleum Refineries Limited.
The proposed hub would provide services including bunkering, transshipment and petroleum re-exports, potentially strengthening Kenya’s role in regional petroleum distribution.
The company is also pursuing regional pipeline expansion towards Uganda and Rwanda as it seeks to increase transportation capacity and serve growing demand in neighbouring markets.
Gulf Energy Signs 25-Year Storage Deal
In August, the subsidiary signed a 25-year crude oil storage and handling agreement with Gulf Energy E&P.
KPC estimates the agreement could generate gross revenue of Sh93.68 billion over its term, subject to actual volumes handled and applicable tariffs.
