Umeme packs a sweet punch with UGX105bn profit

March 22, 2016 in Business, Companies, Energy, Hydro by Editor

KAMPALA, MARCH22- Uganda electric power distributor Umeme romped to a profit of Ushs 105 billion pushed by a tailwind that boosted revenues, an expanded customer base and robust power sales.

The result removes the pall cast over the company in 2014 when it paid a dividend to maintain confidence in the stock despite booking a loss.

Presenting results for calendar 2015 to media and key stakeholders March 21, Umeme Managing Director  Selestino Babungi said revenue rose 18.8 percent to Ushs 1.2 trillion, 143,000 new customers were recruited while Giga watt hours sold increased by 8 percent.

The distributor invested $86 million during the year, expanding and stabilizing the network.

Profits were driven by growth, a more realistic tariff set by the regulator during the latter half of the year, process improvement that saw more delegation to automated systems. All 143,000 new customers were connected to the prepaid platform bringing pushing the proportion of such customers to 52 percent of the customer base.

“2015 was a great year more so to the customers. A lot of investments were made to improve service reliability, technology is taking charge of running the business with 52 percent of our customers now on prepaid metering,” Babungi said.

Network losses were down 1.8 percent to 19.5 percent and the distributor Babungi says he expects to claw back more losses and improve revenue collections when all government agencies get connected to prepaid metering and automated meter reading is rolled out to all 2500 large industrial customers. Umeme’s 500 largest customers account for half its commercial revenues.

The customer base closed the year at 793,544 representing a 22 percent increase over 2014. Some 87,354 customers were migrated to prepaid metering during the year but the company still has a huge backlog exceeding 300,000. The target is to have all customers on prepaide metering by 2018 while 150,000 new customers are targeted for 2016.

The company allocated a dividend of Ushs35.2 per share. Institutional investors hold 40.5 percent of Umeme’s stock while African investment funds hold another 20.3 percent.