Umeme Limited has warned shareholders and investors that it expects to post another financial loss, signaling what would mark the second consecutive loss since the end of its electricity distribution concession in Uganda.
In a public notice issued on Friday, July 31, Umeme said preliminary financial assessments indicate it will record a loss for the six months ending June 30, 2026.
This follows a loss reported for the financial year ended December 31, 2025.
The company attributed the expected losses to the cessation of revenue generation after handing over Uganda’s electricity distribution network to the government at the expiry of its 20-year concession.
“The Board of Directors (the “Board”) of Umeme Limited (the “Company”) wishes to inform its shareholders, prospective investors and the general public that, based on an assessment of the Company’s financial performance for the half year ended 30 June 2026, the Company will most likely register a consecutive loss, following the registration of a loss for the financial year ended 31 December 2025,” the notice read in parts.
“The assessment is based on the fact that the Company ceased to generate revenue following the handover of the electricity distribution system to the Government of Uganda at the natural end of the 20-year electricity distribution concession in Uganda on 31 March 2025.”
The transition ended Umeme’s role as Uganda’s main electricity distributor, bringing to a close a concession that had been in place for two decades.
Operations and distribution assets transitioned to the state-owned Uganda Electricity Distribution Company Limited (UEDCL).
Latest Warning Comes Six Months After Earlier Profit Alert
Despite the expected losses, Umeme said it is continuing to pursue outstanding claims against the Government of Uganda through the dispute resolution process outlined in the privatization agreements.
Umeme said the dispute resolution process is ongoing and that it will update shareholders on any material developments.
The company said more details on its financial performance and the expected loss will be provided in its interim financial statements for the six months ended June 30, 2026.
The profit warning was issued in line with Rule 38(3)(c)(ii) of the Uganda Securities Exchange Listing Rules, 2025.
The rule requires listed companies to notify investors when they expect a material change in their financial performance.
The latest profit warning comes about six months after Umeme warned investors that it expected to post a full-year loss for 2025 following the expiry of its 20-year power distribution concession in Uganda in March.
In its January 29, 2026 notice, the company said the expected loss was linked to the end of the concession and an ongoing arbitration process in London over compensation claims against the Ugandan government.
This followed a net loss reported for the year ended 2024, marking a second consecutive loss-making year.
The January disclosure extended a profit warning issued in mid-2025, which was based on interim results for the six months to June 2025.
At the time, Umeme said the absence of revenue beyond the concession period meant interim performance pointed to another full-year loss.
Compensation Dispute IN London Arbitration
Under the concession and associated privatization agreements, the government is required to compensate the company for unrecovered investments at the end of the contract. A dispute arose over the valuation of that buyout following the concession’s expiry.
Uganda’s Auditor General audited the buyout at US$118.4 million (KSh15.3 billion), a figure the government had relied on.
Umeme disputed the valuation, arguing it does not fully reflect its unrecovered capital expenditure and contractual entitlements.
After a notice of dispute was issued and negotiations failed, the matter was referred to international commercial arbitration in London.
With no continuing revenue-generating operations, Umeme’s financial position is shaped by wind-down costs, asset recoveries, and the eventual resolution of the arbitration.
Umeme’s concession, which began in 2005, gave the company the mandate to distribute and sell electricity to consumers across Uganda before it expired in 2025.
Follow our WhatsApp Channel and X Account for real-time news updates.
Comments
No comments yet. Be the first to share your thoughts.