Umeme, Uganda’s electricity distribution company has recorded a significant drop in its full-year financial result for the period ended 31 December 2023, driven by accelerated amortization of intangible assets.
- The profit after-tax dropped to USh 11.5 billion from USh 148 billion in 2022.
- The Directors recommended a final dividend of USh 54.2 per ordinary share be paid, subject to deduction of withholding tax.
- The amortization and impairment charge for the year increased significantly to USh 442 billion compared to USh 160 billion in 2022.
“As the natural term of concession is coming to its end in March 2025, the International Finance Reporting Standards (IFRS) require alignment of the amortization of underlying fixed assets to the shorter of the remaining contract duration or the underlying useful life of the assets that generate economic benefits to the company,” noted Umeme in a notice.
The total assets as of 31 December 2023 were USh 2,347 billion compared to USh 2,571 billion in 2022. Shareholder equity reduced by 7 per cent from USh 1,010 billion in 2022 to USh 937 billion in 2023, due to lower profit after tax for the year and net dividends paid in the year.
Revenue increased by 16.4 per cent to USh 2,196 billion in 2023 compared to USh 1,887 billion in 2022 on account of an increase in electricity demand by 9.6 per cent, increase in average tariff as determined by the Energy Regulatory Authority (ERA) of 5 per cent, and revenues from the provision of electricity distribution construction services.
Uganda’s electricity demand grew to 4,219 GWh compared to 3,849 GWh in 2022 driven by 10 per cent growth in customer grid connections, improved electricity supply reliability, reduction in energy losses and general electricity demand.
During the period under review, electricity sales to domestic households, commercial, medium-industrial and large industrial customers increased by 10.8 per cent, 11.7 per cent, 9.2 per cent and 8.8 per cent, respectively. When compared to 2020, electricity sales have increased by 31.8 per cent from 3,201 GWh.
“As we are in the 20th year of the distribution concession, the key priorities are to ensure continuity of service to our customers, business performance and investment in the distribution system while ensuring a seamless asset transfer to government per concession agreement terms,” Umeme said in a statement.
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