Umeme Limited, which handed over to the Uganda Electricity Distribution Company Limited (UEDCL) following the expiry of its concession early this year, has reported a significant loss of Shs156 billion for the six months ending June 30, 2025, a dramatic reversal from the Shs13 billion profit recorded in the same period in 2024.
The unaudited interim financial results released by the Capital Markets Authority (CMA), as presented by the company’s directors, led by Selestino Babungi, the Managing Director, paint a picture of an entity in transition, grappling with the operational re-transfer of its electricity distribution system to the Government of Uganda and a pending buy-out amount dispute.
This financial turmoil comes as the Permanent Secretary of the Ministry of Energy and Mineral Development, Eng. Irene Bateebe, links the recent increase in power blackouts to Umeme’s alleged lack of investment towards the end of its concession.
She stated that the unreliable power supply, which has caused significant losses for traders, is a result of overloaded transformers. “In some areas in Wakiso District, they have spent almost two weeks without power,” she noted, announcing that the Ministry is preparing an initiative to increase the capacity of the available transformers across the country. This proactive measure, she revealed, is aimed at reducing the burden on the grid and ensuring a more reliable power supply for both commercial and residential consumers.
According to the directors, Umeme’s financial performance was heavily impacted by the short operating period, which ended in March 2025. This quarter of operations contrasted sharply with the full six months of business in the previous year. As a result, the company encountered the following challenges:
Revenues declined to Shs503 billion from Shs1,152 billion in 2024. Gross profits fell to Shs95 billion from Shs410 billion in 2024, driven by reduced margins and the lag in regulatory income recovery.
The directors noted that the substantial Shs156 billion loss was primarily triggered by an amortisation charge of Shs134 billion. This charge, they contend, was made to adjust the valuation of Umeme’s intangible assets to their current fair value, as required by the International Financial Reporting Standards (IFRS), and is pending the resolution of the buy-out amount dispute with the government.
However, despite the significant losses, Umeme’s financial position remains solvent, with total assets exceeding liabilities by Shs69 billion. The company also reported a healthy cash balance of Shs467 billion, bolstered by the receipt of Shs434 billion (USD 118 million), a partial payment from the Government of Uganda for the buy-out claim.
The directors remain focused on resolving the ongoing dispute with the government over the outstanding buy-out amount. The company has also assured its shareholders and stakeholders of its continued prudent management during this transitional period and its commitment to exploring new business opportunities.
In a final gesture of commitment to its shareholders, the company declared an interim dividend of Shs222 per ordinary share, which was paid by July 31, 2025. This action signals a focus on delivering value even amidst the challenging financial and political landscape surrounding the end of its electricity distribution concession.