JOHANNESBURG – Eskom teetered on near-collapse as its profits plummeted 89 percent in the six months to end September with no hopes for an immediate turnaround.
The utility said it was struggling with defaulting customers and municipalities which impacted its operational costs.
It said it was locked in a permanent loss-making position.
Chief executive Phakamani Hadebe said the utility had more than R400 billion in debt and 72 percent gearing.
“The money we make is not good enough to service our debt, which has risen from R40bn in 2007 to R400bn in 10 years,” Hadebe said, adding that the R250bn invested in the build programme for 3500 megawatts would still need to be improved on.
Eskom profit plunged to R671 million during the period from R6.3bn a year earlier, while finance costs rose to R15.2bn from R11.9bn.
The utility, however, recorded an improvement in liquidity with R52bn funding for the 2018/19 fiscus secured.
It said its wage bill weighed on its operating cost and municipal debt ballooned 25 percent to R17bn from R13.6bn in March this year.
“Eskom cannot solve the financial and operational sustainability challenges that it faces alone,” said new financial officer Calib Cassim.
“The shortfall in tariffs cannot be solved though cost reductions alone, and further indebtedness adds to the problem.”
Municipalities contend that more than R9bn of the debt is as a result of irregular invoicing by Eskom.
Eskom’s financials come as Parliamentarians recommended that former chairpersons Zola Tsotsi, Ben Ngubane and Zethembe Khoza be prosecuted for unethical conduct, together with former chief executives Brian Molefe and Matshela Koko.
Eskom yesterday reported that 14 senior executives implicated in corruption left, 12 criminal cases have been opened, five of which involve nine senior executives, a total of 1049 outstanding cases since April 2018, of which 858 have been finalised, resulting in 99 employee exits.
The utility said lifestyle audits for senior management were in progress as eight regulatory bodies conduct major investigations.
Energy analyst Ted Blom said Eskom would battle to survive without finding a long-term coal supply, proper plant maintenance and secured funding.