 Patrick Bitature The Board Chairman Umeme Ltd | Address: P.o.Box 23841, Kampala Uganda  Umeme: 5,000 households to be connected to power free of charge Sarah Ndagire, a housewife in Lwadda village Matugga Wakiso District central Uganda, has longed to connect her two tenements to the electricity grid.However, the connection fees, which range from Shs98, 000 to Shs326, 000, stood between her and her dream.According to the National Service Delivery Survey 2015 Report, six in every ten Ugandan shy away from connecting to the grid because of high connection fees.And seven in every 10 say the government’s performance in ensuring access to affordable electricity is bad.Now, Ugandans who live within a five–kilometre radius of the Kawanda–Masaka power transmission line but are not connected to the grid will be – “free of charge”.State minister for mineral development Peter Lokeris launched the programme in Matugga, one of the suburbs north of Kampala. Read more ▪ Govt owes Shs64b to Umeme in power bills Government owes electricity distributor Umeme Uganda Limited Shs64.17 billion for power used by some departments, Daily Monitor has learnt.Umeme needs the money to pay for the bulk of electricity it buys from the Uganda Electricity Transmission Company Limited (UETCL).On the other hand, UETCL needs the money to pay the different power generation companies.When contacted, Umeme’s media manager Stephen Ilungole confirmed some government departments owe Umeme money.“Unfortunately, customer information and transactions remain confidential for both government entities and any other customers,” Mr Ilungole said.“As a matter of policy, we don’t discuss customer issues publicly.”It is public knowledge though that over the last three years, the amount the government departments owe the utility company has oscillated between Shs89.5 billion, Shs116 billion. Read more ▪ Umeme shrugs off weak Shilling, posts Shs106 billion profit Power utility company, Umeme, was paying the price for a weak Shilling as it plunged into a Shs7 billion loss. The period saw the weak Shilling wipe Shs73 billion off Umeme’s income at the time. However, the fortunes of the company appear to have changed in the second half as the company recovered.In fact, Umeme’s net profit has hit a new high, according to results released by the utility company. The firm’s net profit rose to Shs105.8 billion5, up from Shs96 billion, according to the financial results. The net profit growth is a result of increased revenue and reduction in foreign exchange losses.“Revenue increased by 18.8 per cent to Shs1.2 trillion supported by an 8 per cent increase in units sold (GWh) coupled with regulatory adjustments in the end user tariff through the quarterly tariff adjustment mechanism during the period,” a statement from Umeme reads. Read more ▪ Umeme issues Shs340b investment plan Power utility company Umeme is planning $100 million (Shs340 billion) investment to boost its capacity as more electricity is brought to the national grid.Mr Selestino Babungi, the managing director, told reporters while touring the nearly completed 40 Megawatt substation in Kira that the investment would go towards new substations, prepaid metering and bringing down power losses.“The new investment will go towards bringing down power losses to 17 per cent. We also need two substations and new feeder lines in Bugiri and Busia. Overall we are looking at a capital investment of between $80 million to $100 million in the next year,” he said. Read more ▪  Weak Shilling eats into Umeme profits Power distributor Umeme is paying the price of a weak Shilling, after it suffered a surprising loss. In its results, the utility company announced at least Shs73b had been knocked off their income due to the Shilling weakening by 19 per cent.This was a 943 per cent rise in unrealised foreign exchange losses from Shs7b .As a result, the company suffered a loss of Shs4.4b compared to a net profit of Shs38.2b.“This is solely due to the increased unrealised foreign exchange losses,” the company said in a statement. The company noted that this loss was “on borrowings” which are denominated in dollars.A company may suffer foreign exchange losses if it has several transactions denominated in dollars yet the core of its business is in Uganda Shillings.The unrealised foreign exchange can be recovered – and in this case, Umeme hopes to recover this through any appreciation of the Shilling.Read more ▪ Umeme share valuation hits an impressive Shs1 trillion “After meeting Umeme management and seeing the company’s operations, we believe it would be a mistake for the Ugandan government to end Umeme’s concession early. The company is delivering on expectations for its investment programme; the new equipment it is installing is state-of-the-art, customer connection rates are rising and grid losses are falling,” reads a report from Renaissance Capital seen by Daily Monitor.When Umeme’s concession runs out, by that time, dividends will have grown by about 250 per cent, according to the report.African Alliance in its East African Power Sector report published, indicates Umeme will perform above the loss reduction target given by the regulator.Mr Selestino Babungi, the chief executive officer Umeme, while speaking to the Daily Monitor, said the company had also tightened their internal controls so as to check fraud, which would increase their profitability. Read more ▪ All new Umeme connections will be pre-paid, says board chairman All new domestic and small commercial power users will effective next month be connected to the pre-paid metering system, commonly known as ‘Yaka’, as Umeme moves to curb power theft and improve service delivery.Speaking at the fifth annual chief executive officers summit in Kampala on Wednesday, Umeme board chairman Patrick Bitature said the move that seeks to improve efficiency, will save the company costs related to conversion of old customers from the post-paid to the pre-paid system.Since the system eliminates people contact, especially meter readers and those that disconnect customers who have not settled their bills, it is also expected to lower operational costs on top of increasing efficiency. Read more ▪ UMEME: 100,000 Ugandans to convert to Yaka About 110,000 Ugandans are projected to convert to the Yaka prepaid billing system , Umeme has said.The power distribution company head of communications, Mr Henry Rugamba, said currently, 95, 000 people have transformed to the system implying that 15,000 are targeted.“The 95,000 are in the districts of Kampala, and Masaka,” he said. “We planned to spend $18 million to actualise our target. Of that amount, $ 8.5 million has been spent so far.”Banda, Kintintale and Nateete are some of the suburbs in Kampala District, where the project is underway. A total of $11.8 million (about Shs46 billion) has been invested in the three suburbs alone.Mr Rugamba says the preference of one district over another is guided by the objective to reduce both technical and commercial losses in the given district, the capacity of a given district to run and maintain the prepayment system, that is, the business readiness, and customer service improvement. Read more ▪  The National Social Security Fund (NSSF) has received a dividend payment of more than Shs 3.3 bn against its shares in Umeme Limited. NSSF is the third largest institutional investor in the utility distribution company, after purchasing an additional 100 million shares in the company in May this year, which increased its stake to 231,722,771 shares, an equivalent of 14.27 percent. The development comes amidst a Parliamentary hearing with MPs expressing concerns that the Umeme investment was “irregular.” Acting Managing Director, Geraldine Ssali said the decision to invest in Umeme Limited was not ill advised since “the Fund carried out due diligence, secured all necessary approvals, and followed relevant procedures.” She further pointed out that the “dividend earnings are a result of the Fund’s overall aggressive but prudent investment strategy that has led to revenue growth of more 200 percent and payment of a return above inflation to members, over the last 3 years.” Read more ▪ Umeme boosts market liquidity Stanbic posted huge profits despite a reduction from last year. There were also 21 million Stanbic shares on offer that were not taken up that analysts say is largely because of a price mismatch with investors price offer hovering at around sh20 per share.Power distributor Umeme that has just concluded a process in which major shareholder Actis let go of more of its stake sold 647,464 shares.Umeme’s overall traded value was sh233.1m - the highest of the day. Umeme closed the Tuesday session trading at an average of sh360 per share. Read more ▪ Actis, the pan-emerging markets private equity firm, has Wednesday announced the successful conclusion of a two-part transaction that has seen the firm, through its subsidiary, Umeme Holdings Ltd (“UHL”), sell a total 45.7percent of Ugandan electricity distribution company, Umeme Ltd (“Umeme”) for $98m. The sale of shares totalling 6.7percent of the company and worth US$13m to Ugandan retail investors and Umeme management and directors was the final step in the transaction, which was led by Stanbic as Lead Transaction Advisor and Stanbic and Rencap as Joint Bookrunners.The retail and management tranche follows the $85m institutional tranche, which was heavily oversubscribed by more than 20 institutional investors in May 2014.The institutional tranche represented 39 percent of the company. Following this latest tranche, Actis remains the second largest shareholder in Umeme, with a 14.3percent residual shareholding. Read more ▪ The Uganda Securities Exchange [USE] has lifted the suspension of trading of Umeme shares on the bourse, after the company confirmed that the negotiations with new shareholders were complete. This follows the company’s majority shareholder Umeme Holdings Limited (UHL) revelation a couple of weeks ago, that it was contemplating a sale of a substantial block [60 percent) of its shares to another investor. The company subsequently through the National security exchange body, applied for a two weeks suspension of trading of its shares pending completion of the transaction. While signalizing the commencement of the trading on Wednesday morning at USE offices in Kampala, Umeme Chairman Patrick Bitature described the development as a signal of great successes in regard to expansion of Uganda’s foreign investment attraction potentials.Read more ▪ Umeme still not trading on Stock Exchange Umeme is still suspended from trading at the Uganda Securities Exchange. Retail traders expecting to be a part of this secondary deal, will have to wait, according to information from the market Tuesday morning. Read more ▪  IGG advises NSSF managers on funds The Inspector General of Government (IGG) has advised National Social Security Fund (NSSF) managers to take caution on every investment the Fund indulges in. This follows The IGG report on NSSF’s decision to invest in Umeme shares.“The decision by NSSF management and the board to invest in the Umeme IPO was in the interest of NSSF. The decision by NSSF Managers and the board to invest in Umeme was made in consultation with stakeholders. Notwithstanding that the investment was made contrary to Article 119; it generated revenue for the Fund to the tune of Shs1.9 billion in dividends,” Irene Mulyagonja the IGG said.Umeme market share value on the Uganda Securities Exchange also appreciated from the initial price, giving NSSF potential for capital gains in case of sales of shares.According to the report, NSSF’s management has been vigilant when investing in member funds.Read more ▪ Umeme Posts Strong Profit Shareholders in Umeme limited are set to be richer, after the company announced a solid profit for the year 2013.The company's net profits grew by 12 per cent, from Shs 57bn the year before to Shs 87bn. Announcing the results at Kampala Serena hotel, Managing Director Charles Chapman said the profit was driven by a massive reduction in power losses and increased efficiency.Power losses dropped from 38 per cent five years ago to 23 per cent for 2013. Chapman promised that in the next five years, the company would cut power losses to 14 per cent. Umeme has recommended a dividend payout of Shs 16.8 per share. Umeme's assets grew by 18 per cent to Shs 889bn last year.Chapman said the company was still stuck with the old network, a challenge for the business. Read more ▪ Power distributor, Umeme Ltd intends to invest a staggering $400m in Uganda over the next four years, a senior official said. Umeme Managing Director, Charles Chapman said the huge sum of money is aimed at boosting efficiency in power distribution, reducing outages and improving service delivery. “Over the next four years we will be investing $400m (1tn) and we want to ensure our local suppliers and contractors have a clear understanding of our strategies and obligations we have to meet the stringent targets set by our regulator and what we need to do to deliver a robust distribution network,” said Chapman. $160m will be invested in rolling out a nationwide pre-paid metering system which is expected to be complete by 2018. Chapman further added Umeme will invest heavily in addressing power theft which is rampant among large companies in the country. Read more ▪ Umeme announces interim divided Power distributor, Umeme Uganda Limited, in line with its dividend policy has announced an interim dividend of Shs 8 per share approved at its meeting. The Board of Directors of the Company resolved to pay the total interim dividend worth Shs 13billion, basing on the performance of the CompanY. Read more ▪  Umeme and Uganda Telecom have launched an extension of the TouchPay and Yaka Service by which Umeme customers can pay their bills using their UTL mobile phones via Msente Mobile Money Service. Announcing at the official launch of the facility at Hotel Africana on Wednesday, Mr Ali Amir, Uganda Telecom’s Managing Director said the telecom’s customers would now be able to pay their Umeme Energy Bills using the MSENTE Mobile Money platform anytime, anywhere and most importantly, at the most affordable rate on the market. Read more ▪   Companies post strong half year results COMPANIES have recorded improved half year financial results in the share markets boosting demand and share prices. The All Share index closed at sh1527 on Tuesday from sh1523 as Stanbic, UMEME and DFCU bank released half year profits for the period ended 30th June 2013. Umeme recorded a massive 52.9% growth in half year results due to lower financing costs, and control over the operating costs. The company registered half year after tax profits of sh47b from sh30b. Patrick Bitature, the Umeme board chairman noted that the company is lining up a $170m (sh442b) financing package to partly fund its $440m capital investment program for 2013. Read more ▪ Nairobi- Uganda power distributor’s shares traded for the very first time on 31 July at the Nairobi bourse, following the activation of the Regional Inter-Depository Transfer Mechanism (RITM). Umeme’s shares were cross-listed at the Nairobi Securities Exchange (NSE) seven months ago but lack of an appropriate infrastructure to allow for the quick transfer of shares has hindered trading, despite the counter being one of the most traded at the Uganda Securities Exchange (USE). Read more ▪ |
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