UEGCL declares net profit of Shs27.9 billion in FY2021/2022

Uganda Electricity Generation Company Limited (UEGCL) has declared a net profit of Shs27.9 billion for the Financial Year 2021/2022.

At the 12th UEGCL Annual General Meeting on Wednesday, Eng. Proscovia Njuki, the Board Chairperson, informed the shareholders that the Company remained profitable during the financial year 2021/2022.

This was depicted by a growth in revenue from Shs169.7bn to Shs210.9bn (24.3% growth), a growth in operating profit from Shs54.7bn to Shs66.3 bn (21% growth), and a growth in assets from Shs7 trillion to Shs7.2 Trillion (2.9%).

The growth, according to UEGCL’s financials, was mainly due to an increase in sales of electricity from the 183MW Isimba in Kayunga District, and the 50MW Namanve thermal plant, which UEGCL repossessed in February from Jacobsen Elktro.

The two plants generated Shs169b, The Namanve thermal plant is ideally a standby generation source, but any-time is permitted by Electricity Regulato-ry Authority to supply 7MW. The positive cash flow enabled UEGCL to remit Shs129.8b on the Shs1.7 trillion ($482m) preferential export buyer’s loan acquired from Exim Bank for the project. The dam, whose construction commenced in April 2015 and was commissioned in March 2019, cost Shs2 trillion, of which government contributed $86m.

“We collect what we can from power sales and the balance comes from the Treasury,” Dr Harrison Mutikanga, the UEGCL chief executive officer, is quoted by Daily Monitor as saying when asked about low up-take of power from Isimba.

“Instead of using capacity charge -based on the highest amount of energy you are estimated to use or consume during a month – we now base on energy sales – how much is actually consumed. The issue here is [low] demand,” he added.

During the period under review, UEGCL remained profitable with a net profit of Shs27.9b, cushioned against foreign exchange losses, given that its dollar-denominated loans were converted to shillings.

“The conversion was a major milestone for us. We are now shielded from the volatility of the foreign exchange rate, and its impact on our bottom line,” the financial report indicated. UEGCL’s shareholders are ministries of Energy and Finance.

During the period, shareholders equity grew by 3.36 percent from Shs832b to Shs860b, while assets increased by 4 percent to Shs7.24 trillion on account of repossession of the Namanve thermal plant previously operated by Jacobsen.

Mr Amos Lugolobi, the State Minister for Planning, said UEGCL remains a liquid company but still needs buttressing from the Treasury to service loans due to Karuma and Isimba dams, noting that: “If Karuma had come on board the profit margins would have been much higher.”

Meanwhile, Energy Minister Ruth Nankabirwa revealed that shareholders had resolved not to extend the Defects Liability Period (DLP) when it expires next year in March for the Isimba dam contractor – China International Water and Electric Corporation.

“We are anxious to see that the defects are done away with, but we will not extend the DLP. However the contractor will continue working on the defects until we are satisfied,” she said.