Company executives are optimistic the remaining half will see a surge in power sales, profitability as government relaxes COVID-19 lockdown
Kampala, Uganda | ISAAC KHISA | Uganda’s electricity distributor, Umeme, is now pinning its profit growth on the remaining six months of the reporting year following government’s move to ease Covid-19 restrictions nearly two months ago.
However, this will also depend on the company’s capability to keep its staff safe, improved operational performance, liquidity management and resolving regulatory bottlenecks.
Financial results released on Aug.17 shows that the company’s profit after tax reduced by 64% to Shs22bn for the past six months ending June 30 as a result of low electricity demand occasioned by coronavirus pandemic.
Electricity sales fell by 2% to 1,538GWh for the past six months compared with 1563GWh recorded in the same period last year as the April’s total lockdown saw demand reduce to as low as 29% on a daily average.
Patrick Bitature, the chairman Board of Directors at Umeme said the lockdown’s impact on revenue as a result of reduction in sales volume was equivalent to Shs13bn.
“As the restrictions are being eased, we continue to note recovery in demand with daily average sales improving to 93% of pre-covid-19 daily average,” he said.
He said since businesses resumed operations, the outlook looks positive as electricity demand and collections have picked up whilst energy losses which had climbed to 17.4% compared with 16.9% during the same period last year, has drastically reduced.
Bitature said the company’s revenue collections, however, recorded a 93.3% decline compared with 98.7% during the same period last year.
Though statistics indicates that Umeme’s revenues for electricity sales as well as revenues from the recently connected customers under Electricity Connections Policy increased by 4% to Shs849bn, the cost of sales increased by 19% to Shs617billion during the same period under review.
Similarly, the company’s gross profit reduced by 22% to Shs232billion driven by distribution revenue shortfalls arising out of reduced electricity demand, increased energy losses and outstanding regulatory income recoveries.
Asset growth However, Umeme’s assets increased from Shs2.54trillion in 2019 to Shs2.64trillion in 2020. The company’s outstanding interest-bearing debt decreased from Shs557billion in December 2019 to Shs502billion as at the end of June.30.The company paid down debt amounting to Shs65billion in settlement of the long term facility with Standard Chartered Bank, Stanbic Bank, International Finance Corporation and a short term revolving facility with dfcu Bank.In terms of customers, the electricity distributor experienced […]
