Umeme registers Shs148b profit in 2022

Umeme registers Shs148b profit in 2022

A 9.7 per cent growth in electricity demand across all customer categories in the Financial Year (FY) 2022 has pushed up the profit of Uganda’s power distributor, Umeme, by Shs9.75billion.

Audited financial results for FY2022 show Umeme’s profit increased to Shs148.215 billion compared to Shs139.141 billion in the FY2021.  

“The revenue collection rate for the year was 99.7 per cent, up from 99.1 per cent in 2021. Our customers in sectors previously impacted by Covid-19 restrictions settled their arrears,” Umeme said.

“The rollout of Yaka prepaid metering and an improved bill payment culture by commercial, industrial and Government Institutions was notable,” the firm added.

According to Umeme, this cash is utilized to financially sustain the entire electricity sector, enabling investments and service delivery.

Although the company’s service provision was characterized by inefficiency in some service provision in 2021, overall operations changed in 2022.

 “We improved efficiency, operating costs per KWh sold and per customer reduced by 7.6 per cent and 5.6 per cent respectively. We are pleased to report improvements in network stability, reduction in energy losses and general improvement in service with a positive customer net promoter score of 21 per cent in 2022,” Umeme said in a statement issued on March 27, 2023.

‘Revenue increase’

Umeme’s revenue marginally increased to Shs1.887 trillion in 2022 from Shs1.885 trillion in 2021.

Further, revenue from electricity sales increased by 7 per cent on account of a volume growth of 9.7 per cent during the year with an average tariff reduction of 2.6 per cent.

“In 2022, we improved our operational performance across key result areas; customer grid connections increased by 7.4 per cent, with an additional 121,132 connections during the year- thereby increasing the customer base to 1.75 million,” Umeme noted.

Throughout 2022, energy losses reduced to 16.8 per cent from 17.8 per cent in the previous year in 2021 which Umeme attributed to re-opening of the economy and the restart of field activities.

Uganda is rolling out the second generation of reforms in the electricity sector that include consolidating the varying electricity segments into one national utility and changing the industry structure, with minimal private sector participation.

However, government will not renew Umeme’s on-going contract that is set to be terminated on March 30, 2025.

“Umeme acknowledges these developments and notes the support received from the Government over the last 18 years of operations. The Company is proud of the considerable achievements registered alongside its partners,” the management said.

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