Kenya Pipeline Company (KPC) cut its dividend marginally to Sh5.81 billion or Sh0.32 per share despite its net profit growing 13.08 percent to Sh11.58 billion in the year to June 2026.
The firm, which listed on the Nairobi Securities Exchange (NSE) in March, had in the prior year paid a dividend of Sh5.9 billion to the National Treasury which was its sole shareholder at the time. The new dividend will be paid to shareholders who will be on record as of November 2026. The dividend payment date is yet to be fixed.
KPC’s net profit rose from Sh10.2 billion a year earlier, helped by higher sales. Turnover grew 8.78 percent to Sh42.98 billion in the review period, mainly on increased fuel throughput in Kenya and the East African region.
The new dividend represents a payout of 50.1 percent of the net income reported in the review period, down from a distribution rate of 57.6 percent the year before.
“We are reserving cash for some of the key critical infrastructure projects that we are set to undertake,” Pius Mwendwa, the acting CEO of KPC said on Wednesday.
Uganda will receive Sh1.17 billion on its 3.662 billion shares while Kenya through the National Treasury will get Sh2.035 billion on its 6.36 billion shares.
Among the key projects that KPC is undertaking include increasing its storage capacity of its tanks at an estimated cost of Sh5 billion and also extending the pipeline to Kampala and later to Kigali, Rwanda.
KPC is also set to splash Sh600 million to enter the fixed internet market. KPC currently leases wholesale dark fibre along its petroleum pipeline corridors to telcos but the firm targets to enter the fixed internet market by February 2026.
The firm’s decision to cut the dividend pay comes at a time its share price at the Nairobi bourse has remained largely unchanged since its listing in March this year.
KPC’s shares closed at Sh9.04 on Tuesday, compared to the Sh9 that the government of Kenya offered to investors at the Initial Public Offering (IPO).
The government of Kenya reduced its ownership to 35 percent from 65 percent with Uganda and other local government institutions taking up ownership in KPC, in line with the IPO that ended decades of government’s sole ownership of KPC.
Kenya’s National Social Security Fund (NSSF) is the second biggest shareholder in KPC with a stake of 22.2 percent while the Unclaimed Financial Assets Authority (UFAA) bought a stake of 3.06 percent.
KPC said the Sh5.81 billion dividend will be paid to shareholders who will be on the company’s register as at close of business on November 30, 2026.
The company has significantly reduced dividend payouts in the last five years with the highest payout being a Sh8 billion that it paid shareholders for the year ended June 2022.
KPC froze dividends for the year to June 2023 but then resumed the following with a total payout of Sh7 billion to the National Treasury.
The latest decision to reduce the payout to shareholders comes at a time that KPC is seeking to ward off competition from Tanzania in the race to be the preferred importation point for refined fuel in the East African region.
KPC is the single biggest player in East Africa’s petroleum sector, storing and transporting fuel destined for Uganda, Rwanda and South Sudan, all of whom are importing fuel under Government-to-Government (G-to-G) deals.
Rwanda had relied on Tanzania for the importation of refined fuel before switching to KPC through a deal that was signed in June this year.
