KenGen, which is 70% owned by the government, said in a statement its pretax profit dropped to 7.94 billion shillings ($64.90 million) from 15.3 billion shillings a year earlier.
It said its total revenue rose 8% to 49.23 billion shillings, while operating costs jumped to 15.74 billion shillings from 12.39 billion shillings.
"Operating costs increased ... largely due to an increase in drilling costs for Ethiopia operations. This, and an increase in depreciation and amortisation ... resulted in a pretax profit of 7.94 billion shillings," KenGen said.
The company, which has an installed generation capacity of 1,904 megawatts (MW), supplies more than 60% of the power for East Africa.
KenGen said it planned to redevelop one of its 45 megawatt (MW) geothermal power plants to increase its generation capacity to 51 MW and upgrade two other plants to increase their total capacity to 320 MW from 280 MW.
It recommended a dividend payment of 0.20 shillings a share, from 0.30 shillings in the previous financial year.
($1 = 122.3500 Kenyan shillings)
(Reporting by George Obulutsa; Editing by Kim Coghill)
