Umeme, has withheld payment of an interim dividend to its shareholders despite recording a 33% growth in profit after tax to Shs64bn for the six months period ending June.30.
The company executives said the profits will be used to pay scheduled term debt and fund ongoing capital investments in the distribution system for efficiencies and improvement in the customer experience.
The company’s net debts were down 20% to Shs268bn as at the end of June.30 compared to Shs 337bn on Dec.30 following the scheduled repayment of Shs90bn on its long-term borrowing.
Net operating cash flow increased by 21.7 % to Shs187.4bn as compared to Shs154bn in 2021 supported by improved cash collections, improved profitability, optimized working capital, and lower financing costs in the period. It also invested Shs55.9bn in the distribution network in line with its capital expenditure program for 2022.
Umeme’s electricity sales increased by 9% to 1,875 GWh amidst a reduction in energy losses to 17.1% compared to 17.9% for 2021, as power consumption in the domestic, commercial, medium, and large industrial consumer segments posted double-digit growth. However, growth in electricity consumption in the extra-large industrial category was flat at 0.7%.
Electricity sales to customers increased by 3% to Shs 876.4 billion as compared to Shs 849.2 billion last year. Despite inflationary pressures in the economy, operating costs reduced by 6% to Shs 115bn as compared to Shs 123 billion in 2021 supported by reorganization of the business during the period and efficiency gains from our continued investments in technology.
Umeme Board Chairperson, Patrick Bitature and Managing Director, Selestine Babungi said whereas economic recovery has been on course, the challenging global environment in the wake of the geopolitical conflicts has led to inflation, supply chain disruptions, depreciation of the Uganda Shilling, an increase in interest rates and a generally weaker operating environment that is projected to impact our customers’ purchasing power and our cost of operations.
Nevertheless, the duo said the electricity sector remained resilient and posted a 9% increase in energy demand, due to the opening of the economy in January this year.
Regrettably, the electricity company recorded six fatalities on the distribution network arising from network interference, power theft, and illegal operations by unauthorized people.
“We appeal to the public to report unsafe networks, power thefts, vandalism, or unauthorized network operations through our multiple service channels,” the duo said.
Last year, Umeme saw its net profit more than triple to Shs139bn owed to an increase in customer base and electricity sales. This is a similar profit earned in 2019 during the pre-COVID period.