Eskom aims to build on positive momentum

In announcing its integrated financial results on Wednesday morning, Eskom declared that it was pleased to be continuing on the upward trajectory of the past few years. The power utility connected 207 189 new households to the national grid and managed to achieve a cost-saving of R20,2 billion in the financial year ended 31 March.

Multiple CFO Award-winner Eskom CFO Anoj Singh (pictured) said the enterprise's earnings before interest, taxes, depreciation and amortisation shot up 14,4% to R37,5 billion in the year ended 31 March, up from R32,8 billion in the same period last year, while the utility's revenue rose by 8% to R177 billion, compared to R164,2 billion in 2016. Primary energy costs were reduced by 2,3% to R82,8 billion, compared to an average increase of 13% over the past five financial years.

In order to grow export sales, Singh said Eskom has concluded new export sale agreements with a number of regional trading partners, ranging from 50MW to 200MW.

Independent Power Producers (IPPs) generated 11 5a29GWh at a cost of R19.8 billion, reflecting an increase of 30.8% compared to the previous year. The average cost increased to 188c/kWh, as proportionately more energy was procured from the renewable energy projects at higher costs than the other IPPs.

"We will continue to engage with government, collaborating closely with the Department of Energy and Nersa to manage IPP programme risks and mitigate any unintended negative operational and financial impacts on Eskom," said Singh.

The group's liquidity position, comprising cash and cash equivalents plus investment in securities, was R32,5 billion at 31 March 2017.

Singh added that Eskom has managed to secure 77% of its funding requirements, including cash on hand, for the current 2017/18 financial year, despite tough market conditions.

Eskom's interim Group CEO Johnny Dladla said the utility's focus has shifted to managing surplus capacity.
"Eskom is ideally positioned to support the economic recovery of South Africa and enable industrial growth across Southern Africa. We will build on the momentum of our performance and efficiency improvements over the recent years and become a more customer-centric organisation that partners with key sectors to increase industrial activity, electricity consumption and job creation," he said. He also promised to focus on corporate governance and ethics in the wake of a series of controversies.

Eskom was due to release its results last week on Wednesday morning, but delayed the release indefinitely at the time without giving any reasons. It was mooted that it was because Eskom auditors SizweNtsalubaGobodo had reported the utility to the Independent Regulatory Board for Auditors due to serious irregularities in its financial statements.

Eskom interim chairperson Zethembe Khoza called the irregularities a matter of great concern. "It is worth noting that the Board has taken adequate steps to the satisfaction of the auditors that the irregularities have been mitigated to an acceptable level," he said.

Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa. Eskom generates, transmits and distributes electricity to industrial, mining, commercial, agricultural and residential customers and redistributors. Eskom buys electricity from and sells electricity to the countries of the Southern African Development Community.