Umeme to pay out Shs87b dividends

Umeme technician carries out a connection recently. PHOTO/ FILE

What you need to know:

  • The dividends, as recommended by the Board of Directors, will increase from Shs19.8 billion to Shs 87 billion in 2022 and will be paid to investors who purchase Umeme shares on or before June 27, 2023, subject to shareholder approval at the Annual General Meeting on May 18, 2023. 

Power distributor Umeme Limited said Monday that it intends to pay out a $23 million (about Shs87 billion) dividend to its shareholders, as it prepares to exit the market.
The dividends, as recommended by the Board of Directors, will increase from Shs19.8 billion to Shs 87 billion in 2022 and will be paid to investors who purchase Umeme shares on or before June 27, 2023, subject to shareholder approval at the Annual General Meeting on May 18, 2023. 
“The dividend, which is subject to withholding tax, will be paid on or about July 20, 2023 to shareholders registered in the books of the company at the close of business on June 30, 2020,” Umeme said in a Monday morning statement.

The company's earnings per share increased from Shs85.7 to Shs 91.3 in the year ending December 2022. While gross profits decreased by 1.5 percent to Shs 633 billion during the same period. Umeme attributed this to lower capital expenses and energy loss. 
According to the company’s audited financial statement, “the year was characterized by negative changes in the macroeconomic environment, inflation, and increased interest rates.”
Despite this, Umeme's outstanding interest-bearing debt fell significantly, from Shs336 billion in 2021 to Shs176.6 billion in 2022, as debt repayments were completed.
Furthermore, the company's operating profit for the fiscal year ending December 2022 increased by Shs 25.3 billion to Shs 238.8 billion.
Electricity billing revenue collections increased from 99.1 percent in 2021 to 99.7 percent in 2022, which the company attributed to the introduction of Yaka pre-paid meters and improved bill payment culture.

Umeme also reported a 7.4 percent increase in customer grid connections during the year, bringing the total customer base to 1.75 million. However, this is a decrease of 8,379 connections from those registered in 2021. 
The government last year said they would not renew the company's license when it expires in March 2025 due to high tariff charges shouldered by Ugandans, and will set up the state-run Uganda National Electricity Company Limited (UNECL) to manage the production, transmission, and distribution of electricity.
Umeme said that it had increased its efficiency, with operational performance indicating a reduction in operating costs per kWh sold and per customer by 7.6 percent and 5.6 percent respectively.
 
The company also reported improvements in network stability, a reduction in energy losses, and a positive customer Net Promoter Score of 21 percent.
Umeme's official data indicated that it had collected over Shs 1.8 trillion in electricity sales, connecting 1.6 million people with the Shs 122.5bn in capital invested. 
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