Eskom projected to make a full-year loss of R20bn
‘We concede the Eskom turnaround remains a difficult and long journey,’ Eskom chair Jabu Mabuza says
State power utility Eskom warned on Thursday that it was expecting to make a full-year loss of R20bn.
This is despite a raft of government bailouts having been awarded to the utility into 2022.
Eskom is saddled with more than R450bn in debt, with the Treasury and the International Monetary Fund labelling the power utility as the largest risk to SA.
For the six months ended September, Eskom reported a seemingly better set of results than it did in July, when it reported a record loss of R21bn for the year ended March 2019. Its interim profits for the period more than doubled to R1.3bn compared with 2018.
At its interim results presentation, Eskom chair and acting CEO Jabu Mabuza warned there were a number of factors that would come into play in the second half of the financial year, and the utility was expected to make another loss of about R20bn for the 2019/2020 financial year, following its record loss of R21bn in 2018/2019.
In the second half of Eskom’s financial year, sales are lower because of the warmer weather. Revenues are also lower because the winter tariffs fall away during this time. A 7% wage increase for employees will also be reflected in the second half of the year.
Eskom also highlighted the persistent issue of municipal debt, now at R25bn, and the ever-rising coal and other primary energy costs.
The national power system has remained fragile when, after a winter without power cuts, Eskom resumed load-shedding in October when multiple unplanned outages and other issues took more than 20% of generation capacity out of the system.
“We concede the Eskom turnaround remains a difficult and long journey,” said Mabuza.
“There are difficult choices and trade-offs that will have to be made. The ultimate goal is to make Eskom a profitable, transparent, agile and a top-forming organisation which is financially independent.”