Cross-listed Ugandan firm Umeme Limited swung to a net loss of Sh6.14 billion (Ush166.7 billion) in the six months to June 2025 from a net profit of Sh478.2 million (Ush12.99 billion) a year earlier.
The loss comes after the end of its power distribution contract in March.
The company, which is currently pursuing an outstanding buyout claim against the Ugandan government through arbitration in London, has also issued a profit warning for the full year 2025 after ceasing to generate revenue following the end of its 20-year electricity distribution concession.
Umeme, which has been cross-listed on the Nairobi Securities Exchange since December 2012, did not make power sales in the second quarter, resulting in a drop in headline revenue to Sh18.54 billion (Ush503.5 billion) in the half-year period from Sh42.4 billion (Ush1.15 trillion) in the six months to June 2024.
Due to the looming end of the concession, the company has periodically revalued its assets to reflect their fair value, as required by the International Financial Reporting Standards.
By the end of last June, the firm’s assets stood at Sh21.7 billion (Ush590.3 billion), compared to Sh51.1 billion (Ush1.39 trillion) in June 2024.
“As such, provisions have been made based on previous asset bases, which have been revalued to their current fair value. The changes are due to the end of the electricity distribution concession and pending resolution of the dispute with the government,” said Umeme in its financial report.
“An amortisation charge of Ush134 billion (Sh4.93 billion) was, therefore, incurred in the period, adjusting the intangible assets to the current valuation, pending the resolution of the dispute with the government of the buyout amount claim. As a result, the company recorded a loss of Ush167 billion compared to a profit of Ush13 billion in the same period in 2024,” said Umeme in its financial statement.
As per the terms of the agreement, the company handed back assets and operations of the power network to the government on March 31, but a dispute arose over compensation for the value of unrecovered capital investments that was due to be paid to the shareholders by the government.
Umeme submitted a buyout demand of $410 million (Sh52.9 billion at current exchange rates), but the Uganda government authorised a payment of $118.39 million (Sh15.3 billion), or Sh9.43 per share, hence the dispute.
Through the arbitration process in London, the company is seeking to compel the Ugandan government to pay it an additional $292 million (Sh37.7 billion). It also indicated that the government was ready to pay additional, unspecified amounts after making the $118 million payment.
After filing the arbitration case and announcing its full-year financials in June, Umeme proceeded to pay a surprise interim dividend of Ush222 (Sh8.17) per share in July.
However, the company did not indicate whether the payout that totalled Sh13 billion was linked to the $118 million that the government paid it in March.
