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Eskom expects its coal costs to increase just 0.3% in the current financial year thanks to the revised contracts. Photo: Getty Images
- Revenues grew slightly to R108.7 billion, from R107.5 billion, while the company’s cash balance decreased to R11.8 billion.
- Eskom’s outstanding debt as of September 30, 2020 amounted to R463.7 billion, up from R454.2 billion in September 2019.
- The power generator expects full-year electricity production to be 14.4TWh, or 6.1%, lower than the previous year.
Eskom has recorded a net profit after tax of R83 million in the interim financial period until the end of September, a period characterized by lower demand for electricity due to the effects of the Covid-19 lockdown on economic activity.
In a statement released on Monday, the power company described the operating environment of the past six months as “very challenging”, and the net profit is a boost from a loss of R1.9 billion seen during the corresponding period in September 2019. .
Revenues grew slightly to R108.7 billion, from R107.5 billion, while the company’s cash balance decreased to R11.8 billion. The state power generator, which is working to restore its weak balance sheet and high debt ratio, says it expects full-year electricity production to be 14.4TWh, or 6.1%, lower than the previous year. .
“Due to the return to operation of many sectors of the economy, the projected impact on sales in the second half of the year is less severe in relative terms than that experienced in the first half,” the company said.
Eskom’s cash balance decreased to R11.8 billion in the last six months, from R7.8 billion in 2019. Net cash flows from operating activities of R18.9 billion were insufficient to pay debt and interest payments of R23.7 billion and R19 .1 billion, prompting the company to seek support from the government to address its serious liquidity problems.
Eskom’s outstanding debt as of September 30, 2020 amounted to R463.7 billion, up from R454.2 billion in September 2019.
While financial woes continue to hit the power generator, its leaders have blamed some of its challenges on a myriad of problems, from escalating past-due debt from non-paying customers, to increases above inflation in the operating costs, until the decisions of the National Energy Regulator. from South Africa (Nersa), which they blame for not giving them rates that reflect costs.
The amounts in dispute through the review requests exceed R110 billion, including the capital injection of R69 billion incorrectly deducted from the determination of the fourth multi-year pricing (MYPD 4). This corresponds to a price increase of about 55%, if made only once in fiscal year 2022, according to Eskom.
“It is widely accepted that the price of electricity in South Africa should migrate towards a rate that reflects costs and covers prudent and efficient costs to ensure the long-term sustainability of the electricity supply industry,” the company said.
The 2019 decision to increase tariffs resulted in a deficit of R14 billion, compared to an application of R27.3 billion.
Recovery of funds believed to have been illegally diverted from the company is being carried out through legal channels. In August 2020, subpoenas were issued to recover approximately R3.8 billion prepaid for Tegeta Exploration and Resources linked to Gupta against former executives and directors, including former board members Ben Ngubane, former CEO Brian Molefe, Anoj Singh , Matshela Koko and Suzanne Daniels, among others.
Other defendants in the case include former mineral resources minister Mosebenzi Zwane, businessman Salim Essa and Ajay, Atul and Tony Gupta.
