Umeme Ltd and Bank of Baroda Uganda surprised investors after they grabbed star status on the local bourse during the first reporting season of 2019 on account of strong profits and dividends posted last year.
Umeme, the country’s leading power distributor, recorded higher revenues driven by increased power sales and highest profits attributed to elimination of a one-off debt provisioning expense worth Ush115.2 billion ($30.3 million) that was incurred in 2017.
This one-off cost was pegged to unpaid investment claims previously filed with the Electricity Regulatory Authority, which was prompted by stiff debt provisioning rules provided under International Accounting Standard 9 that took effect in 2017.
The company also declared a final dividend of Ush28.2 ($0.007) per share for 2018 compared with Ush7.6 ($0.002) per share declared in 2017. A half-year dividend of Ush12.7 ($0.003) per share was issued in the second half of 2018, bringing the total dividend in the previous year to Ush40.9 ($0.01) per share.
Umeme’s net profit before tax rose from Ush44.6 billion ($11.97 million) in 2017 to Ush195 billion ($52 million) in 2018 while total electricity sales grew by 13 per cent to Ush1.6 trillion ($429 million) by end of 2018.
Total customer numbers increased by 14.8 per cent to 1.3 million in 2018, an outcome largely due to the government’s electricity connection drive.