Eskom reports net profit of R1.3bn but warns that sales are declining
JOHANNESBURG - Eskom on Thursday reported a net profit after tax of R1.3 billion for the six months ended 30 September, an improvement from R627 million it posted for the same period last year.
But the struggling power utility said it was not out of the woods as the decline in sales continues, with sales volumes 1.29 percent lower than September 2018.
Eskom interim chairperson Jabu Mabuza said the power utility’s growth was being hampered by capacity shortages and economic conditions.
Mabuza said Eskom had increased its earnings before.
“While we continue to face operational and financial challenges, for the interim reporting period ending September 2019 we are proud to have realised a healthier EBITDA of R30.6bn compared to R28.3bn in September 2018, and a net profit of R1.3bn which was twice than what we achieved last year,” Mabuza said.
“While a net profit of R1.3 billion was realised by September, a R20 billion loss is projected by year end.”
Eskom’s net cash from operations of R19.7 billion was lower than the R26.7 billion achieved in the same period last year.
As a result of cash shortages, Mabuza reiterated that Eskom has lodged applications with the High Court to review the National Energy Regulator of SA’s (Nersa’s)recent tariff determinations.
“Eskom requires a cost-reflective tariff increase. It is for this reason that we are challenging Nersa’s recent tariff decisions in the High Court,” Mabuza said.
“We are pleading for a tariff increase that is consistent with the MYPD methodology.”
Mabuza said maintenance costs as a result of increasing unplanned breakdowns, rising arrear debt from defaulting municipalities, energy costs, employee benefits and debt servicing costs, were becoming too much a burden to bear for Eskom.
He said that all these factors combined will negatively impact Eskom’s performance at the end of the year.
“In view of the arrear debt by municipalities and individual users, which continues to escalate, it is encouraging that President Ramaphosa has recently called on all citizens to pay for the services they receive,” he said.