WALVIS BAY - Electricity distributor Erongo Red paid N$10.2 million in dividends last Thursday to its shareholders.
Erongo Red was formed by merging the service of electricity distribution from the municipalities of Walvis Bay, Swakopmund, Henties Bay and Omaruru; the town councils of Karibib, Usakos and Arandis; the Erongo Regional Council, and NamPower.
Erongo Red chief executive officer Immanuel !Hanabeb said the company is guided by four strategic objectives, being improving financial sustainability, enhancing stakeholders’ focus and collaboration, improving organisational excellence and transformation, and developing talent and institutional capacity. Hence, they could pay out dividends to their shareholders.
“Our aim is to improve service delivery, pooling of human resources, capital resources’ maintenance, continuous investment and addressing infrastructure to create jobs, thereby enabling economic growth. Therefore, we are today paying out dividends to our shareholders that in turn will be used for the development of the respective towns,” !Hanabeb stated. He added that their revenue increased by 8%, while the cost of sales increased by 9%. As a result, the company made a net profit of N$46 million in 2023, compared to a loss of N$19 million in 2022. The loss in the prior year was attributed to an increase in tax due to a once-off correction in the treatment of bulk upgrade prepayments made to NamPower.
“Over the past 12 months, Erongo Red has invested N$191 million in the operations of the business, including the upgrading and maintenance of electricity infrastructure. As municipalities and town councils which are shareholders of this company, our core business is to provide civic services to our communities. We are not driven by profits. Rather, our focus is to provide services to our residents,” he noted.
Board chairperson Michael Skini indicated that the dividends were declared after a thorough review of the company’s financial results and position.
“The decision aligns with the provisions outlined in the shareholders’ agreement, which mandates the declaration of dividends equal to at least 60% of the distributable profits of the company,” he observed.
Acting CEO of the Walvis Bay municipality John Esterhuizen said while accepting the cheque on behalf of all other shareholders that they welcome the financial injection from Erongo Red, as it will assist council in delivering services to its residents. “We have a commitment to providing civic services, and these dividends will supplement municipal efforts in improving these services, thereby benefiting the whole Erongo,” he enthused.
-edeklerk@nepc.com.na