The Uganda Printing and Publishing Corporation (UPPC) recorded a 60 percent decline in profits in the financial year that ended on June 30, 2022, says a report from the Auditor General.
The report indicates that the Corporation's profit dropped to Shs1.204 billion from Shs3.383 billion which was recorded in the financial year that ended on June 30, 2021.
According to the Auditor General, John Muwanga, UPPC blamed the poor performance on stiff competition from budding printing businesses in the market.
Breaking down other factors that contributed to the decline, Kenneth Oluka, managing director of UPPC said: “Some Ministries, Departments, and Agencies (MDAs) do not respect the President’s directive that requires them to give their printing jobs to UPPC."
Oluka added that they are also still reeling from the economic shocks brought on by the Covid-19 pandemic which reduced funding for MDAs. He said this has forced the MDAs to prioritise and rationalise their printing needs.
To impact sales, UPPC is facing diversification into new revenue streams and partnerships. Expansion in their product pillars includes; promotional items, stationary production, branding solutions, publishing (including e-publishing), commercial printing, and projects.
“Not forgetting digitalisation, debt management, and recapitalisation of UPPC through the acquisition of new and modern assets (machinery) boost revenues,” Oluka said.
However, the Corporation also faced a number of other challenges that have been reflected in the report.
UPPC scored five percent on return on assets (ROA). ROA indicates how the company's assets generate revenue with an emphasis on the capacity of management to use those assets to generate income.
"Management explained that it has income-generating strategies such as utilising one of the properties as a printing school. Should resources become available, the properties shall be overhauled to attract investment opportunities,” Auditor General shared in the report.
UPPC was among the 11 Public Corporations and State enterprises that measured gearing levels below 10 percent. The gearing ratio or level measures the proportion of enterprise assets that are financed by debt. A debt ratio of more than 50 is considered critical. UPPC was rated at 0.13 percent which indicated the availability of untapped growth through financing.
In the liquidity assessment, which measures the ratio of Current Assets to Current Liabilities, the Auditor General indicated that UPPC scored 2.8 in 2022 from 2.1 in 2021. The desirable ratio is between 1.5 and 2, varying in different sectors or industries.
Recently, UPPC acquired a high-tech HP Indigo printing machine that delivers high-quality print. Its state-of-the-art printing technologies exceed the quality of traditional printing. It can be used in security printing to protect documents from forgery.
The Corporation is also seeking to upgrade old machines and acquire new machinery to offset the competition.
In the face of stiff competition in a liberal economy, economists and analysts have said that entities like UPPC have to plan ahead to stay relevant in the market.
That, management must reflect on its strategies and study the economic environment to adapt and survive.
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