Umeme to Pay Record Dividend as Arbitration Battle Looms

Umeme Limited, Uganda’s former electricity distribution monopoly, has set markets alight with the declaration of a record Ushs 222 interim, equivalent to approximately KSh 7.96, for FY2025— the largest in the company’s 13-year history as a publicly listed company.

• •The dividend dwarfs past distributions, surpassing even the Ushs 78.2 per share paid in FY2023.
• •Since its 2012 IPO, Umeme has returned a cumulative Ushs 489 per share to investors, cementing its reputation as one of Nairobi and Uganda’s most consistent income stocks.
• •But behind the shareholder windfall lies a company in transition — from national utility to litigation-focused entity.

Market Euphoria on the NSE

Investors on the NSE reacted with a frenzy. Just 45 minutes after market open on June 24, Umeme shares had doubled to KSh 24.70, fueled by investor excitement over the record-breaking Ushs 222 dividend and the looming July 14 book closure. The stock eventually closed at KSh 19.45, up 55.87% for the day.

The rally followed weeks of poor performance. Since resuming trade on June 14, Umeme shares had dropped 25.6%, from KSh 16.00 to KSh 11.90 by June 19, following a two-month suspension and the release of its FY2024 results. While NSE investors scrambled to gain exposure, Umeme’s primary listing on the Uganda Securities Exchange (USE) remained quiet. No trades occurred for over five days as the counter stayed flat at UGX 415 — underscoring the liquidity and investor behaviour gap between the two markets.

Behind the Windfall: Concession Exit and Arbitration

Following the expiry of its 20-year power distribution concession with the Ugandan government on March 31, 2025, Umeme’s record dividend marks a pivot from operations to compensation. With no ongoing business, the company now focuses on cash management and arbitration.

While the government paid USD 118 million in March, Umeme is seeking an additional USD 292 million through international arbitration in London. Its FY2024 results showed a Ushs 511 billion net loss, no final dividend, and no operating income.

What Next?

• •Short-Term: Trading momentum is likely to remain elevated ahead of the July 14 book closure.
• •Medium-Term: Share price movements will hinge on arbitration progress and clarity on the disputed buyout.

• •Long-Term: With operations ceased, Umeme’s outlook now rests on successful litigation and returning capital to shareholders.