A signpost to Kilembe Mines in Kasese District. The mines registered a substantial increase in losses from Shs2.39b to Shs21.35b in the year ended June 2024. PHOTO / FILE
Seven government companies posted a combined loss of Shs316.57b in the year ended June 2024, audit reports indicate.
However, the loss was Shs71.27b lower than the Shs387.84b that public companies posted in the year to June 2023.
Details in audit reviews presented to the Auditor General, indicate that 20 companies, out of 51, were reviewed with seven returning a loss position.
Uganda Airlines, Uganda Railways Corporation and Kilembe Mines posted the largest loss positions, while Uganda Electricity Distribution Company, Uganda Air Cargo Corporation, Uganda National Oil Company and NEC Farm Katonga Limited also posted losses.
During the period, Uganda Airlines saw its loss position reduce by Shs87b from Shs323.6b to Shs237.85b, while that of Uganda Railways Corporation marginally expanded from Shs35.6b to Shs36.34b.
The Auditor General also indicates that losses due to Kilembe Mines and Uganda Electricity Distribution Company rose substantially from Shs2.39b to 21.35b and from Shs2.18b to Shs10.92b, respectively, while Uganda Air Cargo Corporation, Uganda National Oil Company and NEC Farm Katonga posted losses of Shs8.21b, Shs3.78b and Shs1.9b, respectively.
“33 percent were not making profits, thus affecting their return on assets, ability to pay dividends and settle their obligations as they fall due. Unprofitable companies should put in place strategies to improve their performance. In addition, government should develop appropriate financial and non-financial performance assessment indicators for each public [company] to enable comprehensive and standardised performance,” Auditor General Edward Akol, noted in the annual 2024 report.
Data also indicates that the loss was at least Shs101b higher than the combined profits of Shs215.48b generated by 13 companies in the year to June 2024. Profits also reduced from Shs222.99b in the year to June 2023.
The Auditor General noted that Uganda Electricity Transmission Company, although maintained a profit position, saw margins reduce from Shs94.9b to Shs82.25b, while Uganda Electricity Generation Company registered an increase from Shs33.99b to Shs54.28b. Uganda Civil Aviation Authority registered a decrease in profits from Shs39.58b to Shs32b, while Mandela National Stadium saw a substantial growth from Shs2.32b to Shs18.66b.
However, National Housing and Construction Company Limited experienced a 90.5 percent profit decline from Shs34.59b to Shs3.27b, while Uganda Printing and Publishing Corporation, which had made a loss of Shs3b in the year to June 2023, returned a profit of Shs1b.
Other parastatals that posted profits included NEC Luwero Industries (Shs10.65b), NEC Construction Works & Engineering (Shs5.46b), NEC AGRO SMC (Shs4.34b), Insurance Training College (Shs1.824b), and Nile Hotel International (Shs1.02b), among others.
The Auditor General also analysed operating margins of 16 public companies, but only six had operating margins higher than 15 percent, which was considered good, while those of Uganda National Oil Company, Uganda National Airlines Company and Kilembe Mines, whereas had improved, were still below 15, posing a risk to their financial stability.
The report also indicates that at least 20 public companies were reviewed to assess their return on assets – or how they use their assets to generate revenue – but it was found that only five entities had posted a favourable return on assets of more than 5 percent, while 15 registered a performance of below 5 percent, an indication that majority of public enterprises are not sufficiently utilising their assets to generate revenue.
