Umeme shareholders to get sh15 dividend

By David Mugabe

UMEME has announced a sh15 dividend per share following impressive performance boosted by increased revenue and profit after tax of sh57b in 2012.

A total of sh24.4b will be paid out as dividends by June, a few weeks after the annual general meeting to be held in mid-April.

Board chairman Patrick Bitature said the company has benefitted from the initial public offer of late 2012, which enabled it to generate sufficient funds to pay off outstanding debts of sh75b, leaving only the International Finance Corporation (IFC) loan of $20m as the only debt on the company’s books.

The coming onto the national grid of the Bujagali power plant also boosted supply, while several other new substations were launched in 2012 in a country where industrial consumer demand for power is quickly outstripping supply by the day, largely because of a quickly expanding economy.

Umeme chief executive officer Charles Chapman said his firm invested $36m in 2012, while the customer base has risen to 513,000.

One of the critical issues remains the high power loses which is at 26.1%, although Chapman says Umeme is targeting to bring it down to 23% for 2013.

The power utility company also saw its revenues shoot up as a result of the 50% increases in tariffs, as well as increased purchases as the Government withdrew subsidies.

“This is good for sustainability of the sector, which means consumers are funding instead of relying on government injections,” said chief financial officer Selestino Babungi. 

Senior management say the company’s strong balance sheet gives it a strong position to seek funds for its capital investments. 

But questions are being asked whether it is not prudent to reinvest some of the profit after tax earnings for the capital investments instead of portioning a good chunk to dividends.

Babungi said they weighed the option of reinvesting the earnings against some shareholders wish of cash yields.

On the trading floor on Tuesday, there was a fair upsurge in volumes, especially on the Umeme counter just a day after the company announced the dividend to be paid to shareholders. 

Umeme company sold 244,134 shares at an average of sh300 per share, resulting into turnover of sh73m.

The other fairly big transaction on Tuesday was from BATU that sold 13,240 shares at an average of sh2,266 per share, resulting into sh30m turnover.

Stanbic Bank, the most liquid company, sold 63,741 shares to pick sh1.6m in turnover. 

Stanbic however still had the highest number of bids for over four million shares that were not marched by the demand that closed at over two million shares.

Overall, there were six companies, including New Vision and Uganda Clays (UCL), which sold 326 shares and 51,810 shares respectively.

Overall turnover was sh121.