Utilico Emerging Markets Limited Statement of Results

Hamilton, Bermuda – 09 June, 2010 - Utilico Emerging Markets Limited (the “Company”; Ticker: UTILEMU.BH) releases the Chairman’s Statement of results for the year ended 31 March, 2010. Further details, including the latest Annual Report can be found at www.uem.bm  

Chairman’s Statement:

I am pleased to report that Utilico Emerging Markets Limited’s (“UEM”) fully diluted net asset value (“NAV”) continued the recovery started last year and ended the year at 148.37p, up 39.3% and well above the low point of 93.00p on 28 October, 2008. The year to 31 March, 2010 saw the emerging equity markets recover strongly as gross domestic product (“GDP”) growth within the emerging markets gained traction and the equity markets regained their confidence.

The strength and breadth of the recovery has continued to be surprising. As this recovery has gained momentum in the second half of the year our confidence has grown in the corporate recovery and market valuations. Corporate profitability has expanded sharply on the back of tighter cost controls and improved productivity combined with real GDP growth in the emerging markets. While we firmly believe the recovery in a number of markets is well grounded, the world’s economies are developing a three stage recovery. The emerging markets have, for the main part, recovered and are facing concerns over asset bubbles and inflation. The developed markets can be divided between commodity based economies like Canada and Australia, who are experiencing strong recoveries and Europe and the USA weighed down by sovereign debt, a weak recovery, rising debt, unemployment and low confidence.

The utilities sector continues to find little support within the investment community. This is best illustrated in the Index Performance set out on page 12. As can be seen the Bloomberg World Utilities Index was up 23.4% versus the Bloomberg World Index which was up 49.0%. Nearly all markets reflect this bias to an extent. In the emerging markets the MSCI Emerging Markets Utilities Index was up 45.9% (sterling adjusted) as compared to the MSCI Emerging Markets Index which was up 66.9% (sterling adjusted). Against this background the performance of UEM’s fully diluted NAV has been respectable at 39.3%.

While there were concerns over the ability to maintain last year’s dividends, the recovery in earnings in the second half has been strong. The earnings per share (“EPS”) for the full year was 4.67p versus 5.08p last year. Given this outcome the Board has declared a final dividend of 1.05p resulting in a maintained total dividend for the year of 4.80p representing a dividend yield of 3.6%.

In order to pay these dividends, which exceed the revenue earned during the year, we will draw £135,000 from retained earnings brought forward (based on the number of shares in issue at the date of the report).

As markets have recovered there has been a growing shift to wider discounts in the closed end fund sector. UEM has been caught up in this and has seen its discount widen. Against this, the Investment Manager has bought back 12.6m ordinary shares at an average price of 126.98p as an investment opportunity. However, the discount has failed to narrow as shareholders are increasingly concerned about market valuations and are seeking comfort from wider discounts.

The focus on a strong revenue return and a low total expense ratio, including the capitalisation of 70% of the management and finance costs, continues to enable the Company to maintain an attractive dividend payout to shareholders. In light of this focus, the Board has considered it appropriate to amend the terms of the high watermark, as set out in the performance fee calculation within the investment management agreement, to take account of dividends paid following the period in respect of which a performance fee was last paid. This change removes the anomaly that higher levels of dividends reduce the ability of the investment manager to earn a performance fee. Further details of the performance fee are set out in note 4 of the Report and Accounts.

The final exercise date for UEM’s warrants and S shares is 2 August, 2010. These are exercisable at 100.0p and are in the money compared to the current share price of 132.25p (as at 7 June 2010). There are 29.1m warrants and 8.6m S shares outstanding which will result in £37.7m being received by UEM, should they be exercised in full.

Outlook

We remain optimistic about the long-term performance of the emerging markets. The key drivers of economic growth and the emergence of a growing middle class are central to this view. We believe that the emerging markets will continue to offer attractive valuations and investment opportunities.

Clearly, we must be vigilant to the issues facing the sovereign debt markets. They have the ability to severely disrupt the operation of the world’s debt markets and capital flows. While these issues are painful for a number of countries, we do not see them materially disrupting the emerging markets’ long-term growth.

However, markets are susceptible to correction and we will remain alert to the issues in sovereign debt markets, especially in Europe.

Alexander Zagoreos
Chairman
June 2010

The Annual Report and Accounts are published on the Company’s website, www.uem.bm, the maintenance and integrity of which is the responsibility of the Company. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of the website and accordingly, the Auditors accept no responsibility for any changes that have occurred in the Accounts since they were originally presented on the website. Visitors to the website need to be aware that the legislation governing the preparation and dissemination of the financial statements may differ from legislation in their jurisdiction.

NOTES

A final dividend in respect of the year ended 31 March 2010 of 1.05p per ordinary share will be paid on 2 July, 2010 to shareholders on the register at close of business on 18 June, 2010. The total cost of the dividend which has not been accrued in the results for the year to 31 March, 2010, is £2,135,000 based on 203,312,819 ordinary shares in issue at the date of this report.

This statement was approved by the Board on 9 June, 2010. It is not the Company's statutory accounts. The statutory accounts for the financial year ended 31 March, 2010 have been approved and audited, and received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report. The statutory accounts for the financial year ended 31 March, 2009 received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.

The Report & Accounts for the year ended 31 March, 2010 will be posted to shareholders in mid June 2010. In accordance with AIM Rule 26, a copy is available to view and download from the Company’s website at www.uem.bm. Copies may also be obtained during normal business hours from Exchange House, Primrose Street, London, EC2A 2NY.

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