Edward Akol (Left), the Auditor General handing over the report to deputy speaker Thomas Tayebwa
The Auditor General has revealed the most profitable and loss-making public corporations and state enterprises.
According to the Annual Report of the Auditor General for the Year Ended 31st December 2024 presented to Parliament recently, the Auditor General, Edward Akol analysed profitability of twenty (20) public corporations and state enterprises and noted that thirteen (13) made profits/surplus in the year under review, with Uganda Electricity Transmission Company Limited (UETCL) (Shs82.25Bn), Uganda Electricity Generation Company (UEGCL) (Shs54.28Bn) and Uganda Civil Aviation Authority (Shs32Bn) outperforming the rest of the assessed entities. UCAA’s profit reduced by 19% and this reduction is primarily attributed to a sharp increase in operating expenses from Shs248.554Bn to Shs295.618Bn.
UCAA is followed by Mandela National Stadium that made a profit of Shs18.66Bn in 2023/24, up from Shs2.32bn recorded in 2022/23, representing an increase of 701%.
According to the report, this increment was largely due to the receiving additional government support for renovation and upgrade to complete phase one of UGX 17,760,000,000 in form of a subvention from Ministry of Education and Sports (MOES).
The 5th most profitable state enterprise is NEC Luwero Industries Limited after posting a profit of Shs10.65bn in the year under review from Shs 8.05bn recorded in the previous year. This represents an increase of 32.3%.
It is followed by NEC Construction Works & Engineering Limited in 6th position. The company’s profit grew by 11.7% to Shs5.46bn in the year under review from Shs4.89bn.
NEC AGRO SMC Limited is the 7th most profitable state enterprise after posting a profit of Shs4.34bn in 2023/24 from Shs 3.69bn recorded a year earlier.
According to the report, profits for National Housing and Construction Company Limited reduced by 90.5% from Shs34.59Bn reported in the previous year to Shs3.27Bn.
The report adds that in line with the current company strategy, the Company improved the business model from over reliance on long term construction and sale of residential houses to a blended business model of more sustainable business units in the rental market segment along with construction and consultancy services that match short term reporting requirements and performance outlook.
Insurance Training College is the 9th most profitable government enterprise. Its profit reduced by 3% to Shs1.824bn from Shs1.881bn.
It is followed by Uganda Printing and Publishing Corporation, which had made a loss of Shs3.07Bn the previous year and posted profits of Shs1.04Bn in the year under review. The performance was attributed to the good marketing strategies that were put in place to reverse the previous poor performance.
In 11th position is Nile Hotel International Limited that made a profit of Shs1.02bn from Shs0.92bn, representing an increase of 11%.
The increase in profits was attributed to the recovery of the company and accommodation activities that resulted in an increase in revenue for the concessionaire.
It’s followed by Uganda Property Holdings Limited that saw its profit fall by 41.7% to Shs0.638bn from Shs 1.094bn. According to the AG report, the company filled crucial positions of Head of Finance and Operations, Company Secretary and Human Resource Officer leading to increase in staff costs from UGX.2.269Bn to UGX.2.527Bn.
NEC Uzima Limited completes the list of the profitable state enterprise that the AG analyzed. The company’s profit grew by 225% to Shs0.52bn from Shs0.16bn.
Loss-making enterprises
Uganda National Airlines Company Limited tops the loss-making state-owned enterprise. The national carrier made a loss of Shs237.85bn in 2023/24, down from a loss of Shs323.6bn recorded a year earlier. This represents a reduction of 26.5%. This implies improved revenue generation and effective cost management.
According to the report, Uganda Airlines Management is in the process of developing a new ten-year strategy hinged on financial sustainability, operational efficiency, learning and development, and stakeholder engagement. The corresponding initiatives are geared towards revenue enhancement and better cost control. Losses affect the entities’ ability to meet future obligations and/or make investments.
The report reveals that a number of state enterprises and corporations, including Kilembe Mines Limited, Uganda Electricity Distribution Company, Uganda Railways Corporation, and NEC Farm Katonga Limited, reported increased losses compared to the last year’s figures.
From the bottom, Uganda Airlines is followed by Uganda Railways Corporation (URC) after its loss increased by 2.1% to Shs36.34bn from Shs35.6bn. The AG says URC Management reviewed the previous strategic plan and identified key focus areas to improve revenue and profitability, including pricing strategies, asset reprioritization, and disposal of obsolete assets.
Kilembe Mines Limited comes 3rd in as far as loss-making state enterprises is concerned. Its losses grew by 793% to Shs21.35bn in the year under review from Shs2.39bn recorded a year earlier. According to the report, the shareholders were negotiating with a strategic partner to redevelop the company’s production assets and restore profitability.
“Current losses are attributed to historical issues, including legal cases and asset damage from natural calamities, which are expected to be resolved once the partnership is finalized,” Akol says in his report.
It’s followed by Uganda Electricity Distribution Company that saw its losses grow by 401% to Shs10.92bn from Shs2.18bn.
The report says the regulator has continued to disallow lease rental fees in the tariff yet the company incurred depreciation arising from assets in use by Umeme Ltd. This had a long-term effect on the operational efficiency and financial sustainability of the business since there were limited resources to enable continuous repair of the network.
Uganda Air Cargo Corporation is another state-owned loss-making enterprise. Its losses reduced by 17.9% to Shs8.21bn from Shs10bn.
According to the report, the principal revenue generating asset, the Hercules L-100-30 aircraft has been grounded at Jordan Aeronautical systems company (JAC) from November 2022 to date and hence not contributing to the earnings of the Corporation for more than two (2) years. While the aircraft was grounded, it was discovered that it needed an Avionics upgrade in line with the civil aviation regulations.
“In addition, the Corporation has not received the anticipated capitalization from MoDVA as approved by Cabinet. Management has proposed several strategies to improve revenue performance,” the report says.
It is followed by Uganda National Oil Company. However, its losses reduced by 78.4% to Shs3.78bn from Shs17.51bn. The report says the company represents the State’s commercial interests in the petroleum sub-sector across several projects that are still in the development phase and are not generating any revenue until maturity/commissioning. However, the new mandate as the sole importer of petroleum products will greatly improve performance.
NEC Farm Katonga Limited saw its losses increase to Shs1.9bn from Shs0.07bn. According to the report, management has developed a plan to have more mothers produce own bulls and heifers and that they are introducing quick maturing breeds with higher percentage of live weight on the farm using artificial insemination.
The AG recommends that Ministry of Finance should consider recapitalizing the most affected entities to revamp their operations.
