Shares of Uganda’s ex-power distributor, Umeme Limited, have plunged 71% on the Nairobi Securities Exchange (NSE), closing at KSh 6.94 on Tuesday, September 23, from a peak of KSh 23.70 on July 8.
The collapse makes it the worst performer on the NSE this year, far below the second-biggest loser, Nairobi Business Ventures, which is down 16% year-to-date.The sharp decline follows a dividend-driven rally in July, when investors piled into Umeme to capture a record interim payout of UGX 222 per share.Umeme’s 20-year electricity distribution concession expired on March 31, 2025, ending its core revenue stream.
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Once the dividend was locked in, the stock reversed course as attention shifted to structural risks. Trading in Umeme’s shares was suspended from April to June during the concession handover and resumed after publication of 2024 financial results. The delay and uncertainty around compensation further rattled investor sentiment.
The collapse has been largely confined to the NSE, driven by dividend speculation and investor exit risk.
Cause Of Investor Concern
The utility posted a UGX 166.7 billion loss for the first half of 2025, compared to a profit a year earlier, prompting a profit warning. Revenues in the same period fell 56% to UGX 503.5 billion.
The company is also embroiled in a buy-out dispute with the Ugandan government over compensation for unrecovered investments. While Umeme estimates its entitlement at about USD 410 million, the government has paid only USD 118 million and secured a USD 190 million loan to cover further obligations. Arbitration is underway in London to resolve the difference.
Divergence Between Nairobi and Kampala
On the Uganda Securities Exchange (USE), Umeme’s shares have remained broadly stable.
The counter opened 2025 at UGX 415 and closed September 23 at UGX 405, a modest 2.41% decline year-to-date. With the exchange rate at 27.1 UGX per KSh, Nairobi’s current close of KSh 6.94 translates to about UGX 188, far below Kampala’s prevailing price of UGX 405.
What comes next for shareholders hinges largely on the outcome of the buy-out arbitration and the timing of payments.
Analysts note that the company is no longer a going-concern utility but instead a proxy on government compensation. Cash reserves have been bolstered by partial payments, but equity erosion and continued losses leave little visibility on recovery.
Investors are watching closely for the second-half 2025 financials, any updates from the arbitration process, and further guidance from the board. For now, Umeme remains a high-risk counter dominated by uncertainty over its future structure and payouts.