Umeme, the electricity distribution company, has announced a notable 20% rise in its revenue, reaching Shs 1 trillion for the six-month period ending on June 30. This surge in revenue is attributed to an increase in electricity sales.
The company’s operational expenses displayed a slight decrease of 2.6%, amounting to Shs 112 billion, compared to the previous year’s Shs 115 billion. This reduction is attributed to enhanced efficiency, the integration of technology, and optimized supply chains.
The company managed to keep cost increases in check during the reviewed period, thanks in part to lower global and national inflation rates. Additionally, the Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) demonstrated significant growth, rising by 49.7% to Shs 244 billion.
With the approaching conclusion of the concession’s natural term in March 2025, adherence to the International Financial Reporting Standards (IFRS) prompted the company to adjust the amortization charge according to the remaining contract duration. As a result, the amortization charge for the period surged to Shs 210 billion, compared to Shs 79 billion in 2022. Consequently, the company’s profit for the period decreased to Shs 13.2 billion, down from Shs 64.4 billion in the previous year.
During this period, the net operating cash flow saw an 18% increase, reaching Shs 221 billion. This growth was fueled by effective cash collections, operational profits, optimized working capital employment, and financing costs.
In a related development, the company successfully reduced its outstanding loans by an impressive 72%, now totaling Shs 74 billion (equivalent to US$ 20.4 million). The company anticipates the full repayment of these loans by December 2023.
Given the performance observed throughout this period, the company’s directors have recommended an interim dividend of Shs 24.0 per share, scheduled to be payable around February 29, 2024. The date for book closure, allowing entitlement to the dividend, is set for February 9, 2024.
Umeme’s executives shared that electricity sales experienced growth across various sectors, with domestic households, commercial, medium industrial, and large industrial customers seeing increases of 8%, 9%, 9%, and 11%, respectively.
Furthermore, the reduction in connection charges and the introduction of the Uganda Development Bank’s hybrid loan financing scheme have contributed to a rise in new customer applications and connections. In total, over 72,410 new customers were connected to the grid during this period, marking a 28% increase compared to 2022. Consequently, the customer base expanded to 1.8 million.
Efficiency in distribution also improved during the review period, as distribution losses dropped from 17.1% to 16.7%, leading to an increase in distribution efficiency from 81% to 83%. Additionally, the revenue collection rate stood impressively high at 98.9%.
On a concerning note, the company experienced seven fatalities related to its distribution network during this period, primarily due to network interference and unauthorized connections, highlighting safety challenges.
