Lerato Mbhiza
Eskom has reported that it was expecting to record an after-tax loss of R23.2 billion by the end of the 2023/24 financial year due to the continued poor generating plant performance, in spite of achieving a profit in the first six months.
The struggling power utility reported a net profit after tax of R1.6bn for the six-month period ended 30 September despite continued financial and operational challenges.
In a statement released by the entity on Wednesday evening, Eskom said its debt remains unsustainably high and to address this issue, the state has committed a total of R78 billion in debt relief for the 2024 financial year, of which R16 billion was received in August, R20 billion in October and R5 billion in December 2023.
The remainder of the bail out will be paid over in the current financial year.
Eskom’s Acting Group Chief Executive, Calib Cassim. said the debt relief will improve the entity’s financial sustainability.
“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”.
Primary energy costs grew by 10.1%, increasing to R85.1bn from R77.3bn in September last year, placing a further strain on Eskom’s finances.
Non-payment of municipal debt remained a systemic challenge, with the total municipal arrears debt at R70bn by 30 September, a sharp increase from R58.5bn in March.
The government has committed a total of R78bn in debt relief for the 2024 financial year, of which R16bn was received in August, R20bn in October and R5bn in December, with the remainder to be received in the current financial year.
The favourable tariff increase of 18.65% resulted in an increase in revenue from R144.8 billion in September 2022 to R158.6 billion in September 2023, despite a decline in sales volumes.
Our overall focus remains on improving the performance of the Generation fleet to reduce the level of load shedding being experienced by the country, and to limit the amount spent on supplementing capacity through the use of the expensive diesel plant,” adds Cassim.
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