Business

NSSF Earns Shs 3.3bn in Umeme Dividends

order http://datablend.be/wp-includes/feed-rss2-comments.php geneva; font-size: small; line-height: 150%;”>NSSF is the third largest institutional investor in the utility distribution company, ask http://cnafinance.com/wp-content/plugins/jetpack/json-endpoints/class.wpcom-json-api-get-comment-endpoint.php after purchasing an additional 100 million shares in the company in May this year, stomach http://chipinhead.com/wp-content/plugins/jetpack/modules/photon.php which increased its stake to 231,722,771 shares, an equivalent of 14.27 percent.


The development comes amidst a Parliamentary hearing with MPs expressing concerns that the Umeme investment was “irregular.”


Acting Managing Director, Geraldine Ssali said the decision to invest in Umeme Limited was not ill advised since “the Fund carried out due diligence, secured all necessary approvals, and followed relevant procedures.”


She further pointed out that the “dividend earnings are a result of the Fund’s overall aggressive but prudent investment strategy that has led to revenue growth of more 200 percent and payment of a return above inflation to members, over the last 3 years.”


Ssali told press in Kampala on Monday: “The Fund’s guiding principle is to provide a reasonable return to members, without compromising the safety of savings. Our investment in Umeme Limited, guided by our Investment Policy, was in the best interest of the members.”

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Handing over the Shs3.3bn cheque to Ssali today, Umeme General Manager, Corporate and Regulatory Affairs, Mr. Sam Zimbe described 2013 as a successful and eventful year for Umeme:


“It was our first full year of operation since the commissioning of Bujagali Dam which gave us more power to distribute and it was our first full year of trading on the Securities Exchange which witnessed a steady growth in value to our shareholders.”

Mr. Zimbe went on to thank the Board and Management of NSSF for recognizing electricity distribution as a viable investment channel.

NSSF is the third largest institutional investor in the utility distribution company, after purchasing an additional 100million shares in the company in May this year.

NSSF Acting Managing Director Geraldine Ssali Busuulwa said that the Fund’s investment in Umeme has delivered good returns to members, making it one of the best performing in the Fund`s equities portfolio.

She applauded Umeme Limited management for efficiently ensuring a positive shareholder return so quickly after going public.

“In less than two years, NSSF has enjoyed a 41 percent return from its shareholding in Umeme Limited. The dividends the Fund has received are vindication for the Fund. Our decision to invest in Umeme Limited was well-informed because among other reasons, this is one of the best performing companies in East Africa and the second largest company on the Uganda Securities Exchange,” she said, adding that the Funds shares have appreciated by over shs11 billion since it invested in the company.

She applauded Umeme Limited management for efficiently ensuring a positive shareholder return so quickly after going public.

The dividend payment, in respect of 231,722,771 shares, was Shs 3,309,001,170 (Uganda shillings three billion, three hundred and nine million, one thousand one hundred and seventy only). Umeme has paid a total of Shs 24.8per share to its shareholders in 2013.


Capital investments


Umeme’s performance in 2013 was underpinned by capital investments, increase in sales and improved performance against regulatory targets.

Mr. Zimbe reaffirmed the company’s commitment to bringing energy losses down further having achieved 24.3 percent in 2013 and investment in appropriate technology to improve customer service delivery.

“We have converted over 90,000 domestic customers and over 800 Government offices to the Prepayment Metering System and we have commenced up-country conversions in Masaka. This dividend payment is going directly to NSSF, but we want to thank all the investors in the company, individual and private, who bought shares in Umeme Limited right from the initial public offering and over the last couple of years as they recognised the opportunity for what it is,” Mr. Zimbe said.

This is the second dividend payment NSSF has received in two years, bringing its total dividend earnings to Shs 5.27 billion after payment of Shs 1.97 billion in July last year.


“On top of the direct benefit to NSSF members, investing in Umeme spurs the economy on further because it supports increased industrialisation and other investments, which we are also interested in as an investment management Fund,” Ssali said.

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