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Net operating cash flow increased by 18% to Shs221 billion supported by cash collections, operating profits, optimised working capital, and financing costs during the period
Kampala, Uganda | THE INDEPENDENT | Electricity distributor, Umeme has reported a 20% increase in revenue to Shs1tn for the six months of the year ending June 30 citing an increase in electricity sales.
The firm’s performance also shows that its operating costs reduced slightly by 2.6% to Shs112 billion compared to Shs115 billion in 2022 as a result of efficiency, technology uptake, and optimised supply chains.
The reduction in global and country inflation helped to contain cost escalations during the period under review. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) increased by 49.7% to Shs244 billion.
Amortization and net profit
As the natural term of the concession is coming to its end in March 2025, the International Financial Reporting Standards (IFRS) require alignment of the amortization to the remaining contract duration.
Consequently, the amortization charge for the period increased to Shs210 billion compared to Shs 79 billion in 2022. As a result, profit for the period was reduced to Shs13.2 billion compared to Shs 64.4 billion in 2022.
Net operating cash flow increased by 18% to Shs221 billion supported by cash collections, operating profits, optimised working capital, and financing costs during the period.
Meanwhile, the company’s loans were reduced by 72% to Shs74 billion (US$ 20.4 million). The firm is expected to complete its loan repayment in December 2023.
Based on the performance during the period, the directors recommend an interim dividend of Shs24.0 per share payable on or about 29th February 2024. The book closure date for entitlement to the dividend shall be 9th February 2024.
The company executives said electricity sales to domestic households, commercial, medium industrial, and large industrial customers, increased by 8%, 9%, 9%, and 11% respectively.
In addition, the reduction of connection charges and the introduction of Uganda Development Bank’s hybrid loan financing scheme has led to an increase in new customer applications and connections.
More than 72,410 new customers were connected to the grid during the period compared to 56,547 in 2022 representing 28% growth. This resulted in an increase in customer base to 1.8 million.
The distribution efficiency for the period increased from 81% to 83% during the period under review on account of a reduction in distribution losses from 17.1% to 16.7% from 17.1% as the revenue collection rate stood at 98.9%.
On the other hand, the company invested Shs41.9 billion in the distribution network to improve customer experience.
From a safety perspective, regrettably, the company recorded seven fatalities on the distribution network arising from network interference and illegal connections.
