OUR PERFORMANCE:

CFO's Financial Review

CFO's Financial Review

OUR PERFORMANCE:

CFO's Financial Review

FY2023/24 key performance highlights

Revenue

  • Interest income which makes up over 93% of total income, grew by 14% from UGX 2.044Bn in FY2022/23 to UGX 2.340Bn in FY2023/24. This was driven by higher yields especially in the Kenyan market and appreciation of the Kenyan currency
  • Real estate income increased by 11% from UGX 11.95Bn in FY2022/23 to UGX 13.29Bn in FY2023/24 due to rent escalations and increased unit sales in Mbuya compared to the prior year, but below budget by 17% due to lower than planned occupancy rates and house sales
  • Dividend income grew by 21% from UGX 145.1Bn in FY2022/23 to UGX 175Bn in FY2023/24. This was driven mainly by dividend income from Airtel Uganda and a general increase in dividends earned from MTN Uganda, Safaricom, National Microfinance bank, Cooperative Rural Development Bank (CRDB) Tanzania, Stanbic Bank Uganda Limited, UMEME and Tanzanian breweries

As a result, total realised revenue grew by 15% from UGX 2.201Bn to UGX 2.529Bn driven by the growth in fixed income, dividend income and real estate income.

Operating costs

Annual operating costs increased by 16% from UGX 191Bn in FY2022/23 to UGX 222Bn in FY2023/24, and 3% below the budget of UGX 228Bn. The increase from the previous period is attributed to the Fund’s continuous strides towards its strategic direction (Vision 2035), driven by initiatives to improve sustainable return and benefits to members through the Fund’s expanded mandate, increased strategic partnerships and engagement, processes to boost internal capacity and innovative solutions to improve efficiencies in the delivery of services to our members.

The annual cost-to-income (Total Income) ratio dropped to 7% in FY2023/24, down from 16.45% in FY2022/23, driven by a significant increase in total income due to unrealised exchange gains of UGX 64OBn. The expense ratio also improved, reducing to 1.00% in FY2023/24 from 1.03% in FY2022/23, better than the target of 1.08%.

Whereas revenue and collections have grown by a compound annual growth rate (CAGR) of 18% and 12% respectively, costs have only grown by a CAGR 13% over a 10-year period (FY2013/14-FY2023/24). Revenue has posted significant growth over the historical period, and it continually surpassed collections from FY2018/19 onwards. Revenue was higher than collections by 4% in FY2018/19 versus 31% in FY2023/24 and this gap continues to grow.

Interest credited to Members

The Fund declared a return to members of 11.5% in FY 2023/24 resulting in UGX 1.963Bn compared to 10% in FY 2022/23 which resulted in UGX 1.584Bn.

Financial position

  • The Fund balance sheet size grew by 19% to UGX 22.133Bn (FY2022/23: UGX 18.560Bn)
  • This growth is consistent with the combined growth in investments driven by contributions and income generated including unrealised gains net benefits paid out
  • The Fund invests in 3 asset classes: Fixed Income Securities, Equity Securities and Real Estate
  • The 21% growth in Fixed Income investments to UGX 17.293Bn (FY2022/23: UGX 14.340Bn) was due to the increased in investment in Fixed income
  • Equity Investments increased by 23% to UGX 2.924Bn (FY2022/23: UGX 2.370Bn) attributed to the gain driven by a rise in share prices for several equities, additional shares from Airtel Uganda and MTN Uganda, and appreciation of the Kenyan shilling further amplified the market’s performance
  • Real Estate Investments increased by 10% to UGX 1.536Bn (FY2022/23: UGX 1.398Bn) due to progress on ongoing projects including Pension Towers, Temangalo, Lubowaand Mbale.
  • Member Fund grew by 15% to UGX 21.950Bn (FY2022/23: UGX 19.068Bn) driven by contribution collections of UGX 1.932Bn and interest credited to members of UGX 2.073Bn net of total benefits paid of UGX 1.121Bn.

A NEW DAY - CREATING SHARED VALUE FOR SUSTAINABLE GROWTH

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