Eskom: Our financial position is just fine, thanks
Eskom on Wednesday released annual financial numbers it said showed a “strengthened” financial position and insisted the power utility was not in trouble.
The company last week delayed the release of the numbers at 15 hours notice, without adequate explanation.
Eskom said its revenues had increased by 7.9% year on year to the end of March, to reach R177-billion. With electricity sales down, that increase was almost entirely a result of an increase in tariffs.
But its debts and debt-raising showed looming trouble.
In the year its debt arrears increased from R6-billion to R9.4-billion.
Of the 60 municipalities that owe it a great deal of money and signed payment arrangements to prevent themselves from being cut off, 29 made no apparent attempt to honour those agreements.
Eskom said it had secured 45% of the new funding it requires for the 2018 financial year. That means it will still have to raise R39.6-billion in the coming months.
Eskom also said it had increased its electricity exports by 12.1%, very close to the increase it reported in 2016, as it sold off surplus capacity. Even with those exports its overall sales were down 0.2%. Agricultural users had bought 5.7% less electricity than they had in 2016, the company said, making for the biggest decline in demand.
The company, which is still facing legal action from its resigned-returned-fired former chief executive Brian Molefe, said “cohesion of the execo [executive committee] team” tops its key focus areas for the 2018 financial year. It also said it would concentrate on “governance, ethics and accountability”.
Interim chairperson Zethembe Khoza said the results release had been based on a “prudent” consideration of Eskom’s position, but that these concerns had been put to bed. Similarly, he said the Eskom board had been concerned about failures to comply with the Public Finance Management Act and “reportable irregularities” raised by external auditors, but had been reassured by management that the matters were in hand.
Khoza said Eskom had decided to reveal that it would be paid R577-million by the Gupta-owned coal supplier Tegeta, in settling a historic claim over poor coal quality, “in the interests of openness”. The number was first reported by Business Day and Financial Mail, and Eskom has for weeks refused to confirm it, saying it would require Tegeta’s agreement to do so.
Eskom had originally promised, vehemently, to hold the Gupta company to the full R2.2-billion claim it had lodged.
Khoza laid responsibility for the steep discount Tegeta achieved at the door of an independent arbitrator. The parties bring their numbers to the table, he said, but “ultimately the arbitrator decides on the settlement figure”.