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UMEME sees 28.7 percent jump in gross profit as company begs govt to extend soon-to-end concession

Uganda’s electricity distributor, Umeme published days ago its unaudited interim financial statements showing gross profit increased by 28.7 percent to 299 billion in the first six months of 2021 compared to Shs232 billion earned in the same period in the year 2020.

Despite the increase in gross profit in the period under review, Umeme’s Managing Director Selestino Babungi, says lack of clarity on whether the government will extend the 2005 concession limits the company’s ability to raise capital for further investments in the electricity distribution system. The 25-year agreement for umeme to distribute electricity across Uganda ends in 2025.

Babungi however in the statement is hopeful more engagements with the central government on the extension of the much-needed concession will take place. “We await further engagements with government for an amicable settlement of the negotiation,” he says.

Meanwhile, the company saw a decline in its total assets in the period under review as they were recorded at about Shs2.5trillion compared to about Shs2.7 trillion in the first half of 2020.

The financial statement shows electricity sales in the first half of 2021 increased by 11.8 percent to 1,720 GWh up from 1,538 GWh for the same period in 2020, even though energy losses in the period under review were 17.9 percent compared to17.5 percent in the same period in 2020.

Babungi says the company directors have not recommended payment of an interim dividend.

Umeme’s customer base stands at about 1.5 million of which about 30,000 are under post-paid system.

The company’s capital expenditure in the period under review eased to Shs49.6 billion versus Shs77.7 billion invested in the six months to June 2020.

The company’s concession to distribute electricity in the country ends in 2025,even though the government says it is unlikely to renew it, as it feels Umeme has not met its targets.

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