Customers making electricity payments at the Kampala Umeme branch in Uganda
Uganda’s electricity firm Umeme has declared an interim dividend in the half year to June equivalent to Ush38.78 billion ($10.38 million) or Ush23.78 ($0.0064) per share as the company accelerated debt payments ahead of the conclusion of its concession in March 2025.
The dividend will be paid on February 29, 2024, to shareholders who will be on record as of February 9, 2024.
Umeme, which is cross listed on the Nairobi Securities Exchange, did not declare an interim dividend in the same period a year earlier.
For Kenyan investors, the value of the dividends paid by the company has increased thanks to the strengthening of the Ugandan shilling against the local currency in the past 12 months.
The new payout came as the company grew its operating profit 36.4 percent to Ush243 billion ($65.1 million) in the review period, helped by a 19.9 percent jump in sales to Ush1.08 trillion ($289.12 million).
Umeme’s net profit, however, declined 79.5 percent to Ush13.2 billion ($3.5 million) due to a sharp increase in writing off the value of the company’s assets close to the end of the concession.
“As the natural term of the concession is coming to its end in March 2025, the International Financial Reporting Standards require alignment of the amortisation to the shorter of the remaining contract duration or underlying useful life of the assets in generation of economic benefits to the Company,” Umeme said in a statement on Monday.
“Consequently, the amortisation charge for the period increased to Ush209.4 billion ($56.1 million) compared to Ush77.6 billion ($20.8 million) of 2022.”
Umeme shareholders including International Finance Corporation will be compensated to the tune of over $300 million (Ush1.12 trillion), excluding the impact of amortization and other corporate transfers.
The assets and operations of Umeme are set to be handed back to the government at the end of the 20-year concession as part of reforms in Uganda’s electricity sector.
Umeme increased its loan repayment by 12.3 percent to Ush100.83 billion ($27 million) saying it plans to settle the balance in December 2023.
