Umeme Ltd. · NSEKE:UMME
Umeme — Investor Presentation (June 2017)
22 slides from Umeme's investor presentation, June 2017
Slide 1: Umeme Investor Presentation
Moniko Substation, completed in 2016 Umeme Investor Presentation June 2017
Slide 2: Umeme – powering Uganda
Umeme – powering Uganda • Twenty year concession to distribute electricity in Uganda (running to 2025) • Contracted net US$ return of 20% p.a. on investment • Regulated by the Electricity Regulatory Authority with energy losses target, collections target and operating cost allowance agreed through t
Slide 3: Uganda's power sector
Uganda’s power sector • Uganda’s electricity sector was liberalised in 1999, supported by World Bank • Sector unbundled into generation, transmission and distribution to foster transparency & investment • Single buyer model L L L Other IPPs (hydro / thermal) Generation Transmission Distribution 3
Slide 4: Umeme – Footprint & Customer Mix
Umeme – Footprint & Customer Mix 25 district offices across 4 regions Customer Breakdown (%) Commercial / Industrial 8% Domestic 92% Revenue Contribution (%) Industrial - Domestic Large 27% 38% Industrial - Medium Commercial 20% 15% Street Lighting 0% 4
Slide 5: Macroeconomic Environment
Macroeconomic Environment Sales growth weakens % 20% 16% 15% 11.6% 10% 9.3% 7.9% 7.5% 5% 6.6% 4.4% 0% 2010 2011 2012 2013 2014 2015 2016 -5% Uganda Manufacturing Sales (GWh) • High interest rates & election period slowed down • Slowest annual GWh sales growth in recent years economic activity during
Slide 6: System Demand Analysis
System Demand Analysis MW Max System Demand 600 +4.7% 550 539 515 500 488 472 469 450 424 409 400 350 300 2010 2011 2012 2013 2014 2015 2016 System demand CAGR at 4.7% during the period Industrialization drive to support demand going forward 6
Slide 7: Investing Ahead
Investing Ahead Cumulative Capital investment 600 US$m 500 500 US$ 93m invested in 2016 407.4 400 321 300 224 200 166 102 130 100 - 2010 2011 2012 2013 2014 2015 2016 Sample completed projects in 2016 Load Growth Pre-payment Metering • Moniko Substation (US$ 6.8m) • Government of Uganda conversions
Slide 8: Investing Ahead
Investing Ahead Government of Uganda Pre-Payment Project Project implemented in line with government policy to prudently manage fiscal resources while deterring government ministries, departments and agencies from accumulating arrears. The technology is the first of its kind in the world. 8
Slide 9: Safety
Safety One network related fatality in 2016 No. 50 47 Network related fatalities Non-network related fatalities (illegal) 39 40 36 35 32 30 30 28 21 20 16 17 18 10 15 10 7 3 2 1 1 0 0 1 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Non-network fatalities incl. power theft, domestic electr
Slide 10: Investing in service & growth
Investing in service & growth Customer numbers +19.8% Prepaid Revenue Share ('000) % 1,000 157k in 2016 951 20% Prepaid Revenues % of Total Post-paid 65% on pre-paid Pre-paid 794 16% 800 16% 651 574 618 12% 600 513 12% 458 405 400 8% 6% 200 4% 333 2% - 0% 2010 2011 2012 2013 2014 2015 2016 2013 2014
Slide 11: Regulatory performance
Regulatory performance Energy losses Revenue collection % % 105 32 30.0 30 100.3 98.9 99.1 98.2 27.3 100 98.4 28 26.1 Energy losses at 19.0% 26 94.0 24.3 95 95.1 24 21.3 90 22 19.5 20 19.0 85 18 16 80 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 Operating costs Regulatory ta
Slide 12: Financial performance
Financial performance Financials Summary EBITDA (US$) US$ m, Ushs bn 2016 2015 %ch US$ m EBITDA flat y/y 90 Income Statement i Figures rounded 76 76.6 Revenue US$ 383 358 +7% 80 68 Ushs 1,312 1,161 +13% 70 Cost of Sales US$ (258) (229) +12% 58 60 Ushs (882) (743) +19% 46 50 Gross Profit US$ 126 129
Slide 13: Trading update
Trading update Market cap US$180m at Ushs 400 share price 850 850 350 Market capitalisation (US$m) 350 Share price (Ushs) 750 750 300 300 650 650 USE 550 NSE 550 250 250 450 450 200 200 350 350 250 250 150 150 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jan-13 Jul-13 Jan-14 Jul-14
Slide 14: Trading update
Trading update Shareholder Summary No. Top 20 Shareholders (May 2017) % Held Shareholder Distribution (May 2017) 1 National Social Security Fund Uganda 23.2% International 29.4% 2 Allan Gray* 7.1% 3 Kimberlite Frontier Africa Master Fund 7.1% Uganda Inst. 26.0% 4 Investec Asset Management Africa Fun
Slide 15: Summary & Outlook
Summary & Outlook Focus on technical & commercial losses reduction Recognition of investments Resolution of Amendment 2&4 Concession Renewal 15
Slide 16: Appendices
Appendices • Appendix 1: Uganda’s macroeconomic outlook • Appendix 2: Generation Pipeline • Appendix 3: Generation overview • Appendix 4: Tariff analysis • Appendix 5: Karuma & Isimba Projects • Appendix 6: UETCL Transmission Backbone 16
Slide 17: Appendix 1: Uganda's macroeconomic outlook
Appendix 1: Uganda’s macroeconomic outlook 6% Real GDP growth forecast “High commercial lending rates and 5.1% 5.1% 5% 4.7% 4.8% 4.8% 4.9% 4.7% election-driven uncertainty during Q1 dragged down growth in 2016. 4% Uganda Real GDP growth is projected to World average 5.1% within 2017-2021. 3% Pub
Slide 18: Appendix 2: Generation Pipeline
Appendix 2: Generation Pipeline Generation Pipeline +1000MW Large-hydro: MW Karuma - 600 MW (52% completed) MW Generation Outlook – Installed Capacity Isimba - 183 MW (65% completed) 2,000 Agago-Achwa – 83 MW Ayago - 600MW 1,800 Orianga - 400MW Karuma Kiba - 290MW 1,600 Agago-Achwa – 8
Slide 19: Appendix 3: Generation overview
Appendix 3: Generation overview Energy supply mix (Effective Generation) Average Monthly Dispatch Large Hydro Large-hydro, 87% 542MW, 85% Mini-hydro, Thermal 54MW, 9% 1% Co- Generation 5% Cogeneration, 32MW, 5% Mini-Hydro Thermal, 7% 7MW, 1% Source: Umeme, UETCL, MEMD 19
Slide 20: Appendix 4: Tariff analysis
Appendix 4: Tariff analysis USD/KWh 6.0 Real Distribution price 5.5 5.4 5.2 5.2 5.2 5.1 Umeme distribution price is approx. 30% of end- 5.0 user tariff 4.5 4.5 4.2 4.0 3.5 US$ cents Regional End-user Tariffs - Jan 2017 3.0 25 2010 2011 2012 2013 2014 2015 2016 20 20 19 17 16 16 15 15 13 1313 Uganda
Slide 21: Appendix 5: Karuma & Isimba Projects
Appendix 5: Karuma & Isimba Projects Isimba Hydropower project Status: 65% Commissioning: Q3 2018 Karuma Hydropower project Status: 52% Commissioning: Q1 2019 21
Slide 22: Appendix 6: UETCL Transmission Backbone
Appendix 6: UETCL Transmission Backbone 22