Umeme Ltd has recorded a 50 per cent rise in full year profits for 2015, attributed to gains made by the Ugandan shilling against the US dollar in the second half of last year, and a sharp growth in prepaid users.

The power distributor’s profit after tax grew to Ush105.9 billion ($30.9 million) from Ush70.5 billion ($20.6 million) at the end of December 2014.

The Ugandan shilling on the other hand rose by 1.9 per cent against the US dollar in December last year, compared with the previous month, and gained 2.3 per cent in January this year, registering an average mid-rate of Ush3,451.21 against the dollar, Bank of Uganda data shows.

Umeme’s total revenue rose to Ush1.2 trillion ($335.9 million) from Ush977.7 billion ($285.8 million) during the same period. Foreign exchange losses dropped to Ush8.4 billion ($2.5 million) from Ush28.9 billion ($8.5 million).

The overall share of prepaid electricity consumers rose from 200,000 users in the previous year to 400,000 in 2015, which boosted revenue. But persistent power cuts eroded Umeme’s income flows, particularly in busy commercial zones.

The power utility spends about 70 per cent of its annual budget on dollar-based expenses, which has exposed it to effects of exchange rate volatility, observers say. The company imports items such as transformers, cables, electricity meters and spare parts.

“This explains the considerable borrowing in US dollars in the past. But we are now sourcing more raw materials like poles, gumboots and technicians’ clothing from the local market in order to minimise foreign currency risks,” said company managing director Selestino Babungi.