Eskom posts massive net loss of R20.7 billion

To answer the first question, no that is not a typo in the headline, Eskom has said that it incurred a net loss, after tax, of R20.7 billion.

This was the first job of newly appointed acting chief executive officer at Eskom, Jabu Mabuza, at the utility’s financial results announcement for the 2018/2019 financial year.

The losses represent an increase from the year prior of R2.3 billion.

Eskom reports that municipal arrears debt now sits at R19.9 billion.

That isn’t to say Eskom itself isn’t at fault for its losses, a fact Mabuza acknowledged during his presentation.

“We do, however, acknowledge that we have a significant role to play, specifically on cost containment, and we are committed to continue playing our part where we can. After our appointment as the Board last year, our initial focus was to root out financial mismanagement, malfeasance, and corruption, which was critical to restore transparent and effective governance and boost investor confidence in Eskom,” said Mabuza.

“While we are disappointed that we received a qualified audit opinion and are mindful that there is still work to be done, we have made significant progress in addressing these and other emerging issues in the organisation,” the acting CEO added.

In his address as chairman (which can be found here within the Integrated report), Mabuza highlights the fact that Eskom has been steadily dealing with corruption, malfeasance and mismanagement.

Of course, this hasn’t stopped government from stepping in and suggesting Eskom be split into three separate entities.

Also of note from the financial results is how Eskom generated power in the last year.

In total 218 939 GWh of energy was generated with the primary energy sources listed below.

Source GWh
Coal-fired stations 200 210
Nuclear power 11 580
Pumped storage stations 4 590
Hydro stations 1 029
Wind 328
Open-cycle gas turbines 1 202

While it’s nice to see hydro and wind in that mix, we do find it incredibly strange that in South Africa, where the sun is shining for an average of 2 500 hours a year, Eskom has no solar power contributing to the grid. The utility did mention that wind and solar energy can be unpredictable stating that, “renewable energy is not dispatchable, whereas conventional energy sources are dispatchable to a large extent.”

While we can’t argue with the unpredictable nature of the weather, the fact that wind is being used but not solar has our eyebrows raised.

The one shred of good news is that Eskom managed to save R9.9 billion. Unfortunately those savings were chewed up by load shedding.

It’s increasingly feeling as if Eskom is up a creek without a paddle, and the canoe has sprung a leak.

[Image – CC 0 Pixabay]


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