Eskom confirms it faces going-concern challenges this year

Eskom would continue to face going-concern challenges in the current year‚ the utility’s acting chief financial officer‚ Calib Cassim‚ said on Wednesday.

An emphasis of matter related to Eskom’s going-concern status was flagged when it released its interim results for the six months to end-September and this was set to continue‚ Cassim told members of Parliament’s public enterprises committee.

Cassim was part of a delegation of Eskom executives led by interim CEO Phakamani Hadebe that briefed MPs on the company’s financial results to end-March.

He said the challenges facing Eskom were partly due to the low 2.2% electricity tariff increase granted by the National Energy Regulator of SA (Nersa) in 2017-18 and the 5.23% increase for 2018-19.

"I believe that [the going-concern status] will be an issue when we disclose our financials for the year to March 2018. We are expecting that that opinion will probably remain the same for the next 12 months until we can show that earnings before interest‚ taxes‚ depreciation‚ and amortisation (ebitda) is increasing and we are addressing our cost base as well‚" Cassim said.

Several committee members raised concern about Eskom’s going-concern status and its ability to meet its monthly contractual obligations.