March 29, 2018 / 1:19 PM / a month ago

Ugandan power distributor Umeme's 2017 profit plunges

KAMPALA, March 29 (Reuters) - Uganda’s sole power distributor Umeme Ltd saw its pretax profit plummet 77 percent last year from the previous twelve months due to debt servicing costs, the company’s results published on Thursday showed.

The firm has a 20-year monopoly concession that began in March 2005 to distribute power in the East African country.

Profit before tax for last year declined to 44.6 billion shillings ($12.09 million) from 198.1 billion shillings in 2016.

The firm said there was an increase in borrowing and a surge in the London Interbank Offer Rate (LIBOR) - a benchmark for interest rates on some of its debt - and that “as a result of the above, the full year ... profit declined.”

A total of 12 billion shillings will be paid out in dividends for the year, it added.

Umeme has faced criticism from the public and businesses for charging high consumer tariffs which the firm attributes to high energy losses.

Such losses - the difference between power dispatched from source and what is officially consumed - typically occur because of power thefts and leakages along the distribution system caused by old equipment.

Umeme said in 2017 it brought down energy losses in the distribution system to 17.2 percent from 19 percent the previous year.

$1 = 3,688.0000 Ugandan shillings Reporting by Elias Biryabarema; Editing by Mark Potter

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