Umeme has issued a notification to shareholders, revealing that its profitability for the last six months of 2023 will decline.  

According to the notice, Umeme anticipated decline of over 25% in net profit compared to the previous year, which concluded on December 31, 2022.

“As communicated in our Interim Financial Statements for the six months ended 30th June 2023, and in order to comply with International Financial Reporting Standards, the company aligned amortisation of its non-current assets to the shorter of the remaining duration of its Electricity Distribution Concession or the underlying useful life of the assets that generate economic benefits to the Company. The projected reduction in net profits is attributed to the increased amortisation charge for the year.”

“The underlying economic and operating fundamentals of the company remain strong with growth registered in electricity demand, new customer connections, reduction in energy collections,” the statement read in part.

 “As such, the Board wishes to inform shareholders that the company’s dividend policy remains unchanged from the previous communication and shall, for future reporting periods, be dependent on available free cash flows and retained earnings.”

The announcement was issued pursuant to the provisions of Rule 38 (3) of The Uganda Securities Exchange Listing Rules, 2021.

Umeme’s pre-tax profit for the first six months of 2023 plunged by about 82%, partly linked to rising amortisation costs. Pre-tax profit fell to sh16.7b in the first half of 2023, down from sh92.8b in the same period in 2022.