In the first half of this year, Umeme Limited, a power distribution company in Uganda, witnessed a significant 82% drop in its pre-tax profit due to increasing amortisation expenses, according to the company's announcement on Monday.
The company's pre-tax profit for this year's first six months declined to 16.7 billion Ugandan shillings ($4.5 million), a sharp decrease from the 92.8 billion shillings recorded during the same period in 2022. The surge in amortisation costs, nearly tripling, is attributed to the approaching expiration of its operating license, set to conclude in March 2025.
Umeme holds a 20-year license as the exclusive power distributor in Uganda. However, the government has expressed its intent to assume control of power distribution in order to lower consumer tariffs. Given the government's decision not to extend Umeme's license beyond March 2025, the company would need to diversify into other commercial ventures to continue operating beyond that point.
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