Umeme H1 2016 Results Presentation
6th September 2016
Safety: Zero network related fatalities in H1
No.
50
47
Network related fatalities
Non-network related fatalities (illegal)
39
40
36
32
35
30
28
30
21
20
10
16
15
17
10
3
0
2006
9
7
2007
2008
2009
2010
1
1
0
2011
2012
2013
2
2014
0
0
2015
2016
Full Year
Non-network fatalities incl. power theft, domestic electrics, network interference, way-leaves encroachment and unauthorized operations
2
Investing in service & growth
Capital Investment (Cumulative)
Customer numbers +21% in LTM
US$m
500
('000)
1,000
440
400
407
US$32m invested in H1 2016
Post-paid
Pre-paid
800
67k in H1 2016
59% on pre-paid
651
321
300
600
224
200
400
166
102
100
861
794
405
458
513
574
507
130
200
2010
2011
2012
2013
Full Year
2014
2015
2016
353
2010
2011
2012
2013
2014
2015
2016
Customers & Sales Growth
Sales (GWh)
GWh
Full year
Half year
2,458
2,500
2,277
Customers
2,118
Category
1,937
2,000
1,627
1,735
+3.3%
1,500
935
1,000
1,045
1,114
1,220
1,260
Domestic
Commercial
Street Lighting
Industrial - Medium
Industrial - Large
Total
500
2010
2011
2012
2013
2014
2015
2016
No.
Sales
Share Growth GWh Share Growth
785,308 91.3% +21.0%
287 22.7%
-1.2%
8.4% +17.0%
158 12.5%
+3.8%
304
0.0%
-6.2%
0.7
2,459
0.3%
+4.5%
209 16.6%
+4.1%
523
0.1%
+6.3%
607 48.1%
+5.2%
860,563 100% +20.6% 1,260 100%
+3.3%
71,969
0.1% -14.9%
3
Regulatory targets
Energy losses
%
32
Revenue collection
%
105
30.0
30
27.3
28
26.1
26
24.3
Energy losses down to
19.2%
95
24
21.3
22
19.5
20
98.2
2014
2015
98.4
94.0
95.1
19.2
85
16
2010
2011
2012
2013
2014
2015
80
2010
2016
Full Year
US$m
80
Tariff
parameter
Half year
70
55
60
45
55
53
46
27
30
2012
2013
2016
Agreed regulatory targets*
Full year
39
2011
Full Year
Operating costs
40
99.1
90
18
50
100.3
98.9
100
26
29
28
22
20
‘13
‘14
‘15
‘16
‘17
‘18
Energy
losses (%)
23.5
20.5
18.6
17.1
15.9
14.9
Collection
rate (%)
97.3
97.5
97.7
97.9
98.2
98.5
43.8
44.5
45.9
47.4
48.9
50.4
Operating
allowance
(US$m) **
Nominal
10
2010
2011
2012
2013
2014
2015
2016
* Umeme financial year (Jan-Dec)
** Allowance is adjusted annually for international and local inflation
4
Financial performance
EBITDA (US$)
Financial statement summary
US$ m, Ushs bn
Summary income statement
Revenue
Cost of Sales
Gross Profit
Operating Costs
EBITDA
Finance Costs (ex lease)
Profit Before Tax
Tax Rate
Profit After Tax
Financial position at
Total Assets
Shareholders Equity
Net Debt
H1 2016 H1 2015*
%ch
US$ m
90
US$
Ushs
US$
Ushs
US$
Ushs
195
659
(132)
(446)
63
212
184
548
(116)
(347)
67
201
+6%
+20%
+13%
29%
-7%
+6%
80
US$
Ushs
US$
Ushs
(25)
(84)
39
133
(31)
(92)
38
113
-19%
-8%
+3%
+17%
30
US$
US$
%
US$
Ushs
(6)
24
32%
16
54
(5)
25
9%
23
68
+13%
-5%
H1 2016
FY 2015
552
153
175
526
149
142
US$
US$
US$
-29%
-19%
Ushs
33.6
11.0
Ushs
41.7
10.8
Half year
76
68
70
58
60
46
50
35
40
26
26
* 2015 figures are unaudited and conformed to the USD functional currency
2013
2014
38
39
2015
2016
2010
2011
2012
Profit after tax (US$)
US$ m
40
Full year
36
34
31
30
26
25
16
16
15
-20%
+2%
33
10
35
+5%
+3%
+23%
31
20
20
Per share data (Ushs)
Earnings
Interim Dividend
Full year
17
18
19
2013
2014
2015
16
14
10
5
2010
2011
2012
FY10-14 adjusted for unrealized FX losses
2016
5
Trading update
Market cap US$253m at Ushs 526 share price
850
850
Share price (Ushs)
750
650
550
750
650
USE
NSE
550
450
450
350
350
250
250
350
350
Market capitalisation (US$m)
300
300
250
250
200
200
150
150
60
60
Volume (m)
40
40
20
20
0
Jan-13
0
Jul-13
Jan-14
Jul-14
Jan-15
P/E
EV/EBITDA (2)
P/(Buyout amount less net debt) (3)
Dividend Yield
Return on unrecovered investments (US$) (4)
Jul-15
Jan-16
Jun-16 (1)
9.3x
5.6x
1.2x
7.0%
15%
TOP 20 SHAREHOLDERS (JUL 2016)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
NATIONAL SOCIAL SECURITY FUND
UMEME HOLDINGS LIMITED & NOMINEES
KIMBERLITE FRONTIER AFRICA FUND
ALLAN GRAY AFRICA FUNDS
INVESTEC FUNDS
ASHMORE FUNDS
DUET FUNDS
UTILICO EMERGING MARKETS LIMITED
INTERNATIONAL FINANCE CORPORATION
KATTAGAT TRUST
BOUTIQUE COLLECTIVE INVESTMENTS
T.ROWE PRICE
IMARA
CENTRAL BANK OF KENYA PENSION FUND
VANDERBILT UNIVERSITY
CONRAD HILTON FOUNDATION
POHJOLA BANK PLC
OLD MUTUAL
KUWAIT INVESTMENT AUTHORITY
BYARUHANGA WILLIAM
%
15.7%
14.3%
5.8%
5.4%
4.9%
3.4%
3.3%
3.2%
2.8%
2.0%
1.6%
1.4%
1.3%
0.9%
0.9%
0.9%
0.9%
0.8%
0.8%
0.8%
Jul-16
At IPO
10.8x
3.9x
1.2x
16%
Notes
(1) Actual 12 months to 30th June 2016
(2) EBITDA excludes finance income/cost & FX gain/loss. Includes interest on bank deposits
(3) Indicative assuming GoU termination premium of 20% of unrecovered investment
(4) Calculated on prior year unrecovered base. As at FY15
CATEGORY ( JULY 2016)
INTERNATIONAL FUNDS
AFRICA FUNDS (EX. EAST AFRICA)
UGANDA INSTITUTIONAL
EAST AFRICA INSTITUTIONAL
UGANDA RETAIL
DIRECTORS & EMPLOYEES
OTHER
%
43.2%
16.4%
18.6%
13.6%
5.9%
1.7%
0.6%
100.0%
6
Summary & Outlook





Closure of Amendment 2&4 plus recognition of investments
Investments in line with sector growth
Concession Renewal
Revised strategy on technical and commercial losses reduction
Performance-based incentive schemes
7
Appendices
•
•
•
•
Appendix 1: Uganda’s macroeconomic outlook
Appendix 2: Generation Pipeline
Appendix 3: Generation overview
Appendix 4: Tariff analysis
8
Appendix 1: Uganda’s macroeconomic outlook
Positive outlook for economic growth
7%
6.2%
6.4%
Real GDP growth forecast

“Real GDP growth is forecast at
4.5% in 2016, with high
government spending offset by
sluggish private sector activity.
Real GDP growth is expected to
rise to 5.2% in 2018.

Economic growth will be
relatively broad-based, with
telecommunications, financial
services and transport continuing
to perform well. Investment in
infrastructure will be a key driver
of growth, with the construction
industry expected to expand
rapidly.”
6%
4.7%
5%
4%
4.8%
5.1%
4.9%
5.2%
4.5%
Uganda
World
3.6%
4.1%
3%
2.7%
2%
2.2%
2.3%
2.4%
2.3%
2015
2016
2.6%
2.7%
2017
2018
1.9%
1%
0%
2010
2011
2012
2013
Source: Economist Intelligence Unit (July 2016)
2014
9
Appendix 2: Generation Pipeline
Strong Generation Pipeline +1000 MW
MW
MW
2,000
Generation Outlook – Installed Capacity
1,800
Karuma
1,600
1,400
1,200
Isimba
1,000
600
Namanve &
Kakira hydro
400
-
Large-hydro:
 Karuma - 600 MW (40% completed)
 Isimba - 183 MW (47% completed)
 Agago-Achwa – 83 MW
 Ayago - 600MW
 Orianga - 400MW
 Kiba - 290MW
 Agago-Achwa – 83 MW
 Muzizi - 44MW
Bujagali
800
200
Generation pipeline
Kiira
Pre-2000
Nalubale
Mini-hydros (GET-FIT): 156.5 MW inc.
 Siti I – 5 MW
 Waki – 4.8 MW
 Lubilia – 5.4 MW
 Rwimi – 5.5 MW
 Muvumbe – 6.5 MW
 Nyagak 3 – 5.4 MW
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Source: Umeme, UETCL, MEMD
Other
 Soroti Solar – 10 MW
 Tororo Solar – 10 MW
 Siti II - 16.5 MW
 Kikagati – 16 MW
 Kabale Peat plant 33 MW
 Kabale geothermal 30MW
10
Appendix 3: Generation overview
Peak demand c.540MW
Energy supply mix (Effective Generation)
Mini-hydro,
54MW, 7%
Large-hydro,
542MW, 75%
Cogeneration
, 32MW, 4%
Thermal,
100MW, 14%
Average Monthly Dispatch
Large Hydro
88%
Thermal
1%
Co-Generation
5%
Mini-Hydro
6%
Source: Umeme, UETCL, MEMD
11
Appendix 4: Tariff analysis
USD/KWh
6.0
5.5
Real Distribution price
5.2
5.1
5.0
5.0
5.1
4.4
4.5
Umeme distribution price is <30% of end-user tariff
4.3
4.1
4.0
3.5
3.0
30
2010
2011
2012
2013
2014
2015
Regional end-user tariffs (Jan 2016)
2016
24
25
Uganda’s tariffs are competitive
regionally and cheaper than Kenya
across domestic, commercial and
large industrial customers
US$ Cents
20
19
24
20
20
16
17
14
15
17
16 16
14
9
10
17
Uganda
Kenya
Tanzania
11
8
Rwanda
5
Domestic
Commercial
Medium Ind.
Large Ind.
Sources: Electricity Regulatory Authority Uganda, Electricity & Water Utilities Regulatory Authority Tanzania, Electricity Regulatory Commission Kenya, EWSA Rwanda. Data collected
as at January 2016 and converted using using Bank of Uganda official COMESA exchange rates to US$
12