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The electricity distributor’s assets are to be handed over to the government in 2025
Kampala, Uganda | THE INDEPENDENT | A surge in customer base, efficiency in revenue collection and a reduction in energy losses helped the electricity distributor, Umeme to record a 6.5% growth in profit after tax for the year ended December to Shs 148bn.
The company recorded 121,132 new connections during the year boosting its customer base to 1.75 million as the rate of revenue collection increased from 99.1 to 99.7% during the period under review. Energy losses were reduced from 17.8% to 16.8% on account of the re-opening of the economy and the restarting of field activities.
“Our customers in sectors previously impacted by Covid-19 restrictions settled their arrears. The rollout of Yaka pre-paid metering and an improved bill payment culture by commercial, industrial and government Institutions was notable,” the company’s management said.
Umeme’s revenue increased marginally from Shs 1.885 trillion in 2021 to Shs 1.887 driven by an increase in electricity demand, a reduction in energy losses, an increase in new connections, pricing and revenues from electricity distribution construction services. Revenue from electricity sales increased by 7% on account of volume growth of 9.7% during the year and an average tariff reduction of 2.6%.
The company will therefore increase shareholder dividends from Shs 54.1 to Shs 63.9 per ordinary share subject to the approval of shareholders at the Annual General Meeting scheduled for May.18.
“The dividend, which is subject to withholding tax, will be paid on or about 20th July 2023 to shareholders registered in the books of the Company at the close of business on 30th June 2023,” the company’s management said.
“In line with the Uganda Securities Exchange Trading Rules 2021, an investor that purchases Umeme Limited shares on or before 27th June 2023 shall be entitled to the dividend.”
Cost of sales surges
The company’s management cost of sales increased by 0.9% to Shs 1.25trillion during the year citing an increase in generation levy from 0.3% to 0.7% in the second half of the year and bulk purchases.
Umeme said it remains committed to meeting its mandate through the end of its concession on electricity distribution with the government which ends in March 2025.
Smooth transition
“We hereby extend our re-assurance to the government, stakeholders and the shareholders of our commitment to a smooth translation process back to government operation of the distribution system, while continuing to meet our contractual obligations, and expectations of our shareholders,” the company added.
The assets and operations of Umeme Limited are set to be handed back to the government at the end of the concession as part of reforms in the country that include the consolidation of varying electricity segments into one national utility with minimal involvement of the private sector.
So far, the government has taken over the management of the thermal power plant in Namanve and Nalubaale and Kiira Hydropower Stations in Jinja.
Upon the end of the 20-year concession, the government is expected to compensate private shareholders in the company including the International Finance Corporation.
