Umeme Ltd. · NSEKE:UMME
Umeme — FY2021 Earnings Presentation
23 slides from Umeme's earnings presentation, 2022
Slide 1: Financial Year Results Presentation
Financial Year Results Presentation
Slide 2: Country and Macro Economic Overview
Country and Macro Economic Overview FY 2021 Results Presentation 01
Slide 3: Macro Indicators Economic Recovery
Macro Indicators Economic Recovery 70.0 2021 2022e 150.0 50.0 140.0 GDP Growth 3.4% 6.0% 30.0 130.0 Inflation 2.16% 5.01% 10.0 120.0 Debt position 49.1% 50.2% Outlook +ve +ve -10.0 110.0 Jun-19 Aug-19 Aug-20 Aug-21 Dec-19 Dec-20 Dec-21 Feb-20 Apr-20 Feb-21 Apr-21 Oct-21 Oct-19 Oct-20 Jun-20 Jun-21 B
Slide 4: Sector and Regulatory Updates
Sector and Regulatory Updates Umeme Investor Presentation 2022 03
Slide 5: Sector Updates
Sector Updates Amendment of the Electricity Act Electricity Connection Policy The amendment covers several areas; • Collected USD 9M of the USD 25M, • Penalties for power theft and vandalism arrears outstanding USD 16.6M • Strengthen the regulatory framework • Government working on a USD 500M+ for •
Slide 6: Operational Highlights
Operational Highlights FY 2021 Results Presentation 05
Slide 7: Electricity Annual Sales
Electricity Annual Sales Sales GWh 3,500 3,507 3,182 3,201 3,011 3,000 2,760 Sales Breakdown by Tariff 2021 Industrial - Extra 2,500 Large, 18% Domestic, 2,000 30% 2017 2018 2019 2020 2021 Industrial - Large, 21% Sales Revenue Customer Category Growth Growth Domestic 7% 6% Commercial, Industrial - 1
Slide 8: Losses & Collections
Losses & Energy losses Cash collections Collections % 20 105 % 18.0 102.5 18 17.2 17.5 100.3 16.6 99.7 99.2 16.4 100 100.2 16 14 95 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 • Losses stagnated at mid-year levels of • Collections closed at 99.2% in 2021. 18% • The Covid-19 restrictions impact
Slide 9: Customer Connections
Customer Customer Numbers Prepaid % of Total Revenue Connections ('000) % 2,000 Post-paid 40% 1,531 Pre-paid 1,470 1,526 33% 32% 30% 1,500 1,292 28% 1,125 24% 951 24% 21% 1,000 16% 1,015 1,247 1,450 1,529 16% 618 852 500 8% 333 273 277 222 57 70 - 0% 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019
Slide 10: Operating Expenses (UGX bn)
Operating Expenses (UGX bn) UGX bn 260 240 226 • Operating costs mainly driven by increase in 219 220 214 network repairs and maintenance costs and 183 administration expenses. 180 164 • Key movers were Distribution network R&M, 140 Software support and transport costs. 100 2016 2017 2018 2019 2020
Slide 11: Financial Highlights
Financial Highlights FY 2021 Results Presentation 10
Slide 12: Financial Summary (UGX)
EBITDA Revenue 63.8% Net Debt 402.3 bn 13.5% Total Assets 33% 1,885 bn 381.5 bn 5.9% Financial Operating Operating Cashflow (Net) Expenses 2,507 bn Summary (UGX) 6.3% 6.5% 295.2 bn 239.9 bn FY 2021 Results Presentation 11
Slide 13: Financials Summary (UGX Bn)
Financials Summary (UGX Bn) Income Statement FY 2021 FY 2020 %ch Revenue 1,885.0 1,660.8 13.5% • Gross profit increased to UGX 642 Cost of Sales (1,242.8) (1,181.9) 5.2% bn from UGX 479 bn in 2020 on Gross Profit 642.2 479.0 34.1% account of improved distribution Gross Profit Margin 34.1% 28.8% 18.4
Slide 14: Dividend for the year / Reducing Leverage
Dividend for the year Reducing Leverage • Dividend Per Share recommended – Ushs • Outstanding term debt as at December 2021 - 54.1 $96m. • Pay-Out Ratio 60% adjusted for FX effects. • Scheduled repayments through to December 2023 Without the effects on direct PAT, Pay-Out where term debt will be ful
Slide 15: Buy Out Amount
Buy Out Amount FY 2021 Results Presentation 15
Slide 16: Buy Out Amount / Modifications
Buy Out Amount Modifications Any restoration, reinforcement, replacement, upgrade, Upon natural termination of the Agreement, the Buy Out or expansion of the Distribution System by the Amount shall equal 105% of the cost of the Modifications that Company and all other capital investments made by is
Slide 17: Concession Start Asset Re-transfer
Concession Start Asset Re-transfer FY 2021 Results Presentation 17
Slide 18: Valuation Metrics
Valuation Metrics P/B Ratio vs P/(Buyout less Net Debt) EV/EBITDA 3.0 7.0 2.5 6.0 2.0 5.0 1.5 4.0 1.0 3.0 0.5 2.0 0.0 1.0 2012 2014 2016 2018 2020 0.0 2012 2014 2016 2018 2020 P/B P/(Buyout - Net Debt) • Umeme is trading at attractive levels with key • The EV/EBITDA is trading at 63% discount to met
Slide 19: Strategic Goals, Objectives & Priorities
Strategic Goals, Objectives & Priorities FY 2021 Results Presentation 19
Slide 20: Tariff Margins
Tariff Margins 100% 80% 60% • The company achieved a 34% 40% gross margin in the 2022 base tariff, in line with 2021. 20% 34% 34% 33% 0% 2020 2021 2022 Umeme Distribution Margin Generation & Transmission FY 2021 Results Presentation 20
Slide 21: Strategic Goals & Objectives
Strategic Goals & Objectives Service & Profitability Safety Supply reliability, loss Staff and customers reduction, cost Concession Resolution safety amidst evolving containment while Concession clarity with pandemic sustaining cash collection Government of Uganda. environment. levels. Resolve outst
Slide 22: Sector Priorities
Sector Priorities Access Reliability Electricity Uptake Affordability Increase access Reliable Power and Industrialization- Competitive tariffs to electricity Quality of Service. driven demand to for industry and to 80% by Reduced frequency ensure uptake of new domestic and duration of generation Ca
Slide 23: Investor Relations Calendar
Investor Relations Calendar 19th May 2022 – Annual General Meeting for 24th June 2022 – FY 2021 Final Dividend Book Closure Date the year ended December 2021 22nd July 2022 – Dividend Payment Date FY 2021 Results Presentation 23