Uganda electricity distributor Umeme Limited has reported a loss for the first half of 2015.

The company attributes the loss after tax of $1.29 million to unrealised forex losses of $17.8 million from financing activities and Electricity Regulatory Authority (ERA) guarantees.

In a statement, the firm said that its foreign exchange losses rose to $20.9 million from $2 million in the first half of 2015, while finance costs rose 114 per cent to $7.4 million, due to increased borrowing from the long term financing facility, with $34.6 million invested over the six months for upgrade of its network, new connections and prepaid metering.

The firm took some of these loans from Stanchart and CFC Stanbic Uganda units.

“The first half of 2015 saw a 6.6 per cent year to year increase in gigawatts sold and overall sales climbing 13.4 per cent year to date to $157.1 million. The growth in revenue was driven by additional customer numbers to 713,750. The first half has also seen a reduction in system losses from 21.6 per cent to 19.1 per cent through a combination of commercial and technical initiatives,” Umeme said.

As a result, profit before tax fell 95.8 per cent year to date to $659,846, with the utility posting an after tax loss of $1.29 million from a profit of 10.9 million in 2014. Umeme's gross profits grew by 30.6 per cent to $57.5 million compared to $44 million in 2014, largely from returns on investments.

The energy utility firm said that it hoped to recover the unrealised foreign currency losses over the life of the concession through quarterly tariff adjustment mechanism.