Electricity distributor Umeme said Tuesday that its asset writedowns rose last year, which it said would lead to a more than 25 per cent drop in profits for the year to December 2023.
The charge relates to the utility’s writedown of its non-current intangible assets over the shorter of the remaining term of its distribution concession or their expected useful life to the company. Umeme’s concession ends in March 2025.
Last August, Umeme reported a sharp fall in half-year earnings, which it also chalked up to a surge in amortisation expenses — in particular a writedown on the value of its service concession contracts. Amortisation charges rose to Shs210.2bn from Shs78.5bn in the first half of 2022.
The company said that it expects its operating profit before amortisation to be up on the previous year.
“The underlying economic and operational fundamentals of the company remain strong with growth in electricity demand, new customer connections, reduction in energy losses, operating cost efficiencies, investments in the distribution system and strong cash collections,” it said in a statement to the Uganda Securities Exchange.
“As such, the board wishes to inform shareholders that the company’s dividend policy remains unchanged from the previous communication and shall, for future reporting periods, be dependent on available free cash flows and retained earnings.”
The company’s share price was unchanged at Shs400 on Tuesday and Wednesday following the announcement.
