Umeme Issues Profit Warning, Cites Losses from Concession Exit

KAMPALA | Umeme Limited has warned shareholders and investors to expect another year of financial losses, marking the second consecutive year the company will close its books in the red, following the termination of its electricity distribution concession in Uganda.

In a public notice issued this week, the company’s Board of Directors confirmed that based on internal assessments of its financial performance for the year ended December 31, 2025, Umeme is “most likely to register a loss.”

This follows a loss already reported for the year ended 2024 and is directly attributed to the cessation of operating revenue in the first quarter of 2025, after Umeme’s 20-year electricity distribution concession officially ended on March 31, 2025.

“This is primarily due to the cessation of operating revenue generation at the end of the first quarter of 2025,” Umeme stated, explaining the impact of the transition of Uganda’s electricity distribution network to the government-owned Uganda Electricity Distribution Company Limited (UEDCL).

Unresolved

The company also reiterated that it is actively pursuing its compensation claims against the Government of Uganda through the ongoing dispute resolution process.

As of June 2025, Umeme had increased its claim to USD 292 million (approximately UGX 1.1 trillion), citing additional unrecovered investments above the USD 118 million (Shs 446 billion) already paid by the government based on an audit by the Office of the Auditor General.

Negotiations between the two parties failed to fully resolve the matter, and Umeme has since moved to initiate arbitration proceedings in London, as stipulated in the Concession and Privatization Agreements.

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The board told stakeholders that updates on material developments would be communicated as the arbitration process advances.

Umeme further noted that full details of its financial performance for 2025, along with the audited financial statements, will be published and circulated to shareholders upon completion of the annual audit.

The announcement is the latest in a series of regulatory disclosures following Umeme’s exit from Uganda’s power distribution sector—an exit that has left the company without an operating business and entangled in a high-stakes financial standoff with government authorities.

Investors and analysts are watching closely, as the arbitration outcome could significantly impact the company’s balance sheet and future operations, including any potential winding-down or strategic restructuring.