The Uganda Securities Exchange (USE) has warned investors against investing money in Umeme’s shares at a time when the company is reporting losses for the financial year 2023/2024.
A statement issued by the USE regarding this matter reads in part, “The Uganda Securities Exchange hereby notifies all investors and the general public that the involuntary suspension instituted on Umeme Limited on 31st March 2025 and further extended to 12th June 2025 has been lifted.”
“Trading on the Umeme counter has been restored effective 13th June 2025 following the expiry of the involuntary suspension, and publication of the financial statements for the year ended 31st December 2024. While trading has resumed, investors are advised to exercise caution and make informed decisions when dealing in shares of Umeme Limited,” the statement adds.
The involuntary suspension by the USE arose after the Uganda Electricity Distribution Company Limited (UEDCL) took over from Umeme as the national power distributor in April this year, following the expiry of its concession agreements with the government.
Umeme Demands Shs1,050,137,120,000
Following the takeover of power distribution by UEDCL, the government of Uganda secured USD118 million, approximately Shs432 billion, from Stanbic Bank Uganda, which was given to Umeme as the buyout amount for the investments undertaken during its time of operation, to wit, the 20 years of the concession agreement.
However, the Umeme Board of Directors disputed the amount and engaged the government in arbitrations held in London, UK, where the company demanded USD 292 million, approximately Shs1.05 trillion, as the buyout amount that was agreed upon by the company’s Board of Directors.
The Umeme BoD includes: Selestino Babungi, Gerald Majera Ssendawula, Dr. Silver Mugisha, Ricardo Ridolfi, Anthony Marsh, Florence Namatta, Stephen Emasu, Patrick Bitature, and Andrew Buglass.
It is not yet clear whether the government will agree to Umeme’s demands or not, and communication to that effect is yet to be issued by the Ministry of Energy and Mineral Development.
Umeme Posts Multibillion Losses
Meanwhile, as Umeme demands more money from the government for the buyout, we have since established that the company has posted losses worth billions of shillings in the year 2023/2024.
According to Umeme’s audited financial statements for the year ended December 2024, Total Assets were Ushs1,389 billion compared to Ushs2,347 billion at 31 December 2023.
The decrease in total assets was mainly attributed to increased amortisation of intangible assets during the period and the impairment provision for other financial assets under dispute with the government of Uganda.
As such, the total Loss after Tax for the year amounted to Ushs511 billion compared to Profit of Ushs11 billion for 2023.
In the same vein, the Net Operating cashflow reduced to Ushs292 billion compared to 461 billion in 2023 due to a reduction in payables and a lag in receipt of amounts due from the government.
As a result of Umeme’s poor performance in the past financial year, the Board of Directors has since resolved not to pay dividends for the year ended 31 December 2024, which doesn’t paint a rosy picture about the company for the shareholders and potential investors!