South Africa’s largest private health care network expects diesel costs to more than quadruple to R165m this year as it runs generators to help contain the impact of rolling blackouts.
Generator diesel costs increased to R67m in the six months through March from R10m a year earlier because of the consistently high number of power cuts and increased fuel costs, Netcare said in its earnings report on Monday.
The company is among a growing number of businesses forced to rely on alternative sources of electricity as Eskom implements daily blackouts because it can’t meet demand.
Most of Netcare’s acute care hospitals have the capacity to operate independently of the grid, the company said. The company has uninterrupted power supply systems and 200 backup diesel generators to support all its facilities, and invested in installing a solar power base across 72 sites, capable of generating 18 to 20 gigawatt hours per year.
Astral Foods skips dividend as profit drops
Astral Foods, one of South Africa’s biggest chicken producers by revenue, skipped paying an interim dividend as profit dropped by 89% because of power cuts.
Load-shedding cost the group R741m in the first half of the year. That was due to increased spending on feed as it had to sustain birds for longer because outages delayed slaughtering, as well as the cost of diesel, wages and overtime, Astral said in its results report.
For the second half of the year, Astral forecasts spending about R45m a month on diesel and all capital expenditure has been placed on hold, except that required for necessary maintenance and emergency measures in electricity and water supply.
Lower royalties for franchiser Famous Brands
Food services franchiser Famous Brands will take a lower royalty and marketing percentage on sales generated by its franchise partners during load-shedding hours to help support the businesses.
The move is part of a financial-relief programme implemented in March, the group that owns brands including Steers, Wimpy and Debonairs Pizza said on Monday.
“We remain concerned about South Africa’s weak economic prospects and expected high levels of load-shedding,” Famous Brands said.
“This will continue to strain consumers and the small business sector.”
Siemens urges SA to encourage private investment
South Africa needs private investment in its rail lines and ports if it is to benefit from the global energy transition by moving the green metals it mines efficiently to international markets, said Sabine Dall’Omo, CEO of the Sub-Saharan Africa unit of Siemens AG.
“Rail and port systems in South Africa and across the continent are in dire need of investment for maintenance, security, and expansion,” Dall’Omo said on Monday.
“Public-private partnerships or other forms of investment can help ensure the necessary capital flows to properly maintain this infrastructure for everyone’s benefit.”
Pharmacy group coughs up R90m for diesel
Pharmacy chain Dis-Chem Pharmacies spent R90.7m on diesel to run generators and keep its stores open in the year through March.
While Dis-Chem’s early investment in generator capacity resulted in minimal disruption to its ability to trade, it increased spending on diesel by 65% from the previous year, according to a statement published on Friday.
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