Uganda's Umeme 2014 pretax profit hit by weaker shilling

KAMPALA (Reuters) - Uganda's sole power distributor Umeme Ltd said on Monday its 2014 full-year pretax profit fell 11.8 percent from the previous year, hit by foreign exchange losses. Pretax profit for the period to end-December fell by 11.8 percent from the previous year to 101.67 billion shillings ($34 million), the firm said in a statement. "The decrease in profits is attributed to the higher foreign exchange losses," Umeme said in a statement. Arthur Nsiko, an analyst at African Alliance told Reuters the shilling's depreciation had trimmed the firm's profits because it buys power in dollars and sells electricity to its customers in the local currency. "So whenever the shilling weakens it means they incur higher costs for their key input," Nsiko said. Uganda's currency the shilling has lost 6.6 percent to the dollar so far this year, hit by the globally strong U.S. currency and dollar buying by companies and importers. Umeme said it reduced power losses - a key regulatory benchmark - to 21.3 percent in 2014 from 24.3 percent in 2013. Power losses, the difference between kilowatt-hours generated and those distributed to end-users, arise from hitches in the distribution network and illegal connections. Umeme, which is listed both on Ugandan and Kenyan bourses, said it would pay a final dividend of 19.5 shillings a share for 2014, compared with 16.8 shillings in the previous year. Partly owned by UK private equity firm Actis, Uganda's state-run pension fund, National Social Security Fund (NSSF), and South Africa's Investec Asset Management, Umeme holds a 25-year power distribution concession in Uganda. The power sector in Uganda includes many power generators which all sell to a single transmission firm, Uganda Electricity Transmission Company. Power is then distributed by Umeme. ($1 = 2,965.0000 Ugandan shillings)