File picture: Henk Kruger/African News Agency (ANA)

Cape Town - Eskom said on Thursday its net profit for the first six months of the financial year rose to R1.3 billion from R0.6 billion, but predicted its full year results would again be a loss in the order of R20 billion.

For the first six months, earnings before interest, tax, depreciation and amortisation also improved, reaching R30.6 billion, compared to R28.3 billion in the same period last year, while international sales improved, the power utility said. 

But Eskom chairman Jabu Mabuza said that for a number reasons, the company is expected to post a loss for 2020 and its financial ratios are likely to deteriorate further before showing an improvement. 

“As we know financial performance is seasonal, projections are that we will declare a loss for the full year’s results, similar to that of last year," he said.

"Contributing factors include revenue variance between the winter and summer periods with higher demand in the winter and higher winter prices, higher primary energy costs in summer due to higher production from renewable IPPs in summer, and increased price of coal, employee benefits from salary settlements and escalating municipal arrear debt."

Municipal debt had now reached R25.1 billion, a total increase of R5.2 billion since March, or an average increase of more than R850 million a month.

The company's own debt has increased to R454 billion.

A total of 61 percent of funding required for the 2020 financial year had been secured by September, the company said. It had saved R5.6 billion, but some of this could be undone towards March 2020 by the need to spend money on diesel to stabilise the grid as plant performance had weakened.

Its generation plant performance had also decreased, said Eskom, with availability now at 70 percent compared to 75 percent in the same period of the 2019 financial year.

The company reported a financial loss of R20.7 billion in 2018/19.  

African News Agency (ANA)