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Sales of state-owned power company Eskom for the six months to end-September declined almost 6% compared with the same period last year. This contributed to a more than 50% decline in after-tax profit for the period.
Its net profit after tax declined from R3.8bn last year to R1.6bn for the current period.
“Sales volumes declined by 5.9% ... the decline was largely a result of supply constraints, which led to load-shedding and load curtailment, coupled with lower electricity demand from customers at times due to difficult economic conditions and the impact of increased embedded self-generation such as solar PV and wind,” Eskom said in its interim results released on Wednesday.
Despite the extensive use of expensive diesel open-cycle gas turbines (OCGTs) used to mitigate load-shedding during high-demand periods, the number of load-shedding days for the six months to end-September increased from 102 in 2022 to 183 this year.
The decline in performance of the generation fleet was also shown in the worsening energy available factor (EAF), which shows total energy generated as a percentage of total installed generation capacity. The EAF to end-September for the current year was 55% compared with 59% last year.
Revenue grew to R158.6bn, a 9.5% increase from the R144.8bn in September 2022, due to the favourable impact of the 18.65% tariff increase for the 2024 financial year but this was insufficient to offset poor performance and higher costs incurred to run the OCGTs for extended periods.
Eskom’s own debt and arrear debt owed to it by municipalities also continued to increase, further weakening the utility’s finances.
Eskom acknowledged its debt, which had increased from R424bn in 2022 to R443bn in the current period, remains unsustainably high. To address this, the government has committed to transfer R78bn of the R254bn in debt relief to be provided over the next three years in the current fiscal year.
Arrear debt owed by municipalities jumped from R58.5bn to R70bn.
“Government’s debt relief solution will go a long way towards improving Eskom’s financial sustainability and liquidity in the short to medium term, the impact of which we have already seen with the recent credit upgrades. We continue to execute our turnaround plan to improve financial and operational performance in the medium to long term,” acting CEO Calib Cassim said.
The focus now remains on improving the performance of the generation fleet to reduce the level of load-shedding and to limit the amount spent on supplementing capacity through the use of the expensive OCGTs, he said.
Eskom posted full-year losses of R24bn for the year to end-March and R12bn in the previous year. It told parliament earlier this year that it again expected a loss of about R23bn for the 2024 financial year.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Eskom earnings take another load-shedding hit
Sales of state-owned power company Eskom for the six months to end-September declined almost 6% compared with the same period last year. This contributed to a more than 50% decline in after-tax profit for the period.
Its net profit after tax declined from R3.8bn last year to R1.6bn for the current period.
“Sales volumes declined by 5.9% ... the decline was largely a result of supply constraints, which led to load-shedding and load curtailment, coupled with lower electricity demand from customers at times due to difficult economic conditions and the impact of increased embedded self-generation such as solar PV and wind,” Eskom said in its interim results released on Wednesday.
Despite the extensive use of expensive diesel open-cycle gas turbines (OCGTs) used to mitigate load-shedding during high-demand periods, the number of load-shedding days for the six months to end-September increased from 102 in 2022 to 183 this year.
The decline in performance of the generation fleet was also shown in the worsening energy available factor (EAF), which shows total energy generated as a percentage of total installed generation capacity. The EAF to end-September for the current year was 55% compared with 59% last year.
Revenue grew to R158.6bn, a 9.5% increase from the R144.8bn in September 2022, due to the favourable impact of the 18.65% tariff increase for the 2024 financial year but this was insufficient to offset poor performance and higher costs incurred to run the OCGTs for extended periods.
Eskom’s own debt and arrear debt owed to it by municipalities also continued to increase, further weakening the utility’s finances.
Eskom acknowledged its debt, which had increased from R424bn in 2022 to R443bn in the current period, remains unsustainably high. To address this, the government has committed to transfer R78bn of the R254bn in debt relief to be provided over the next three years in the current fiscal year.
Arrear debt owed by municipalities jumped from R58.5bn to R70bn.
“Government’s debt relief solution will go a long way towards improving Eskom’s financial sustainability and liquidity in the short to medium term, the impact of which we have already seen with the recent credit upgrades. We continue to execute our turnaround plan to improve financial and operational performance in the medium to long term,” acting CEO Calib Cassim said.
The focus now remains on improving the performance of the generation fleet to reduce the level of load-shedding and to limit the amount spent on supplementing capacity through the use of the expensive OCGTs, he said.
Eskom posted full-year losses of R24bn for the year to end-March and R12bn in the previous year. It told parliament earlier this year that it again expected a loss of about R23bn for the 2024 financial year.
erasmusd@businesslive.co.za
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