9 months after Umeme shares were publicly listed a midst a lot of pessimism, the company is doing so well and if the results of the first 6 months of 2013 are to go by, 2013 is going to be yet another good year.
Should Umeme maintain the current growth, witnessed in the first 6 months of 2013 and we have all reasons to believe that the company will maintain if not outshine, Umeme could this year hit the trillionaire’s club raking in well over Ushs1 trillion in revenues and over Ushs100 billion in net profit.
As a result, shareholders could partake of a dividend bounty in excess of Ushs45 billion in dividends. Our projections are based on performance over the last 18 months as well as the law of economies of scale that dictates that Umeme’s cost per unit sold will continue to reduce as more power is available for distribution at relatively stable fixed costs.
Our dividend projections are informed by profit projections and the company’s published dividend policy that commits to pay out at least half of its net earnings to its shareholders. According to the recently released un audited financial results, the power distributor’s net profit rose by 52.9 percent to Ushs 47.3bn in the first six months of 2013. This was a result of increased revenue by 17.6 percent to Ushs 467bn from Ushs 397bn and reduced finance costs.
“The increase is attributed to 12% increase in sales units (1,045GW against 935GW in the same period in 2012), a 3.6% increase in average sales price and 2% increase in other revenue elements,
