State-owned power company Eskom’s sales for the six months to end-September were almost 6% lower than in the previous matching period. This contributed to a fall of more than 50% in taxed profit for the period.
Its net profit fell from R3.8bn last year to R1.6bn.
“Sales volumes declined by 5.9% ... the decline was largely a result of supply constraints, which led to load-shedding and load curtailment, coupled with lower electricity demand from customers at times due to difficult economic conditions and the impact of increased embedded self-generation such as solar PV and wind,” Eskom said in its interim results released on Wednesday.
Despite extensive use of expensive diesel open-cycle gas turbines (OCGTs) used to mitigate load-shedding in high-demand periods, the number of load-shedding days for the six months to end-September rose from 102 in 2022 to 183 this year.
The decline in performance of the generation fleet was also shown in the worsening energy available factor (EAF), which shows total energy generated as a percentage of total installed generation capacity. The EAF to end-September was 55% compared with 59% last year.
Revenue rose to R158.6bn, a 9.5% increase on the R144.8bn in September 2022, due to the favourable effect of the 18.65% tariff increase for financial 2024, but this was insufficient to offset poor performance and higher costs incurred to run the OCGTs for extended periods.
Eskom’s own debt and arrears debt owed to it by municipalities also continued to increase, further weakening the utility’s finances.
Eskom acknowledged its debt, which rose from R424bn in 2022 to R443bn in the current period, remains unsustainably high. To address this, the government has committed to transfer R78bn of the R254bn in debt relief to be provided over the next three years in the current fiscal year.
Arrears debt owed by municipalities jumped from R58.5bn to R70bn. “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,” said acting CEO Calib Cassim.
“We continue to execute our turnaround plan to improve financial and operational performance in the medium to long term.” The focus now remains on improving the performance of the generation fleet to reduce the level of load-shedding and to limit the amount spent on supplementing capacity through the use of the expensive OCGTs, said Cassim.
Eskom posted full-year losses of R24bn for the year to end-March and R12bn in the previous year. The power utility told MPs earlier this year it expected a loss of about R23bn for the 2024 financial year.
BusinessLIVE
Power utility Eskom’s earnings are dealt another blow by load-shedding
Image: 123RF/mushroomsartthree
State-owned power company Eskom’s sales for the six months to end-September were almost 6% lower than in the previous matching period. This contributed to a fall of more than 50% in taxed profit for the period.
Its net profit fell from R3.8bn last year to R1.6bn.
“Sales volumes declined by 5.9% ... the decline was largely a result of supply constraints, which led to load-shedding and load curtailment, coupled with lower electricity demand from customers at times due to difficult economic conditions and the impact of increased embedded self-generation such as solar PV and wind,” Eskom said in its interim results released on Wednesday.
Despite extensive use of expensive diesel open-cycle gas turbines (OCGTs) used to mitigate load-shedding in high-demand periods, the number of load-shedding days for the six months to end-September rose from 102 in 2022 to 183 this year.
The decline in performance of the generation fleet was also shown in the worsening energy available factor (EAF), which shows total energy generated as a percentage of total installed generation capacity. The EAF to end-September was 55% compared with 59% last year.
Revenue rose to R158.6bn, a 9.5% increase on the R144.8bn in September 2022, due to the favourable effect of the 18.65% tariff increase for financial 2024, but this was insufficient to offset poor performance and higher costs incurred to run the OCGTs for extended periods.
Eskom’s own debt and arrears debt owed to it by municipalities also continued to increase, further weakening the utility’s finances.
Eskom acknowledged its debt, which rose from R424bn in 2022 to R443bn in the current period, remains unsustainably high. To address this, the government has committed to transfer R78bn of the R254bn in debt relief to be provided over the next three years in the current fiscal year.
Arrears debt owed by municipalities jumped from R58.5bn to R70bn. “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,” said acting CEO Calib Cassim.
“We continue to execute our turnaround plan to improve financial and operational performance in the medium to long term.” The focus now remains on improving the performance of the generation fleet to reduce the level of load-shedding and to limit the amount spent on supplementing capacity through the use of the expensive OCGTs, said Cassim.
Eskom posted full-year losses of R24bn for the year to end-March and R12bn in the previous year. The power utility told MPs earlier this year it expected a loss of about R23bn for the 2024 financial year.
BusinessLIVE
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