Eskom posts R2.3bn loss, R19bn in irregular expenditure

Eskom suffered a net loss of R2.3-billion in 2018, the state-owned power producer revealed at it financial results presentation on Monday.

The power utility said its net cash from operations declined from R45.8-billion to R37.6-billion, as it struggled with leadership and operational challenges.

Eskom Chair Jabu Mabuza also said there had been R19.6-billion in irregular expenditure since 2012, with much of the irregular expenditure being reported in 2018.

“This was a result of us shaking the cupboard so hard that so many skeletons came tumbling down,” he said.

“The verification and cleaning up exercise resulted in a significant increase in the number of reported irregular expenditure in 2018 (from R3-billion to R19.6-billion), with many of the items reported arising in prior years. Where information was not readily available, alternative methods were used where practical to identify irregular expenditure,” the utility said.

The power utility admitted that its “transition towards financial and operational sustainability required resolute, tough and decisive leadership”.

Its liquidity remained a going concern, with a massive R4.2-billion owed to it by municipalities.

“Eskom continues to face significant financial and liquidity challenges in the short term, mainly due to the high debt burden, low sales growth and increased finance costs”.

The power utility, which has been hit by leadership challenges, is battling a long standing financial stability crisis, including a debt of R13.5-billion owed to it my a number of municipalities.

In March, Moody’s downgraded Eskom’s credit ratings from B2 from B1, citing an absence of concrete plans to place its business on a sound financial footing. B2 is the fifth rung of sub-investment grade debt.


The current wage demands by unions are also adding to the firm’s financial woes, with labour unions currently discussing Eskom’s latest options of 7% and 7.5% increases, which were tabled after a round of bruising negotiations.

The firm initially offered no increases, citing its difficult financial position. Eskom and the unions were drawn to the negotiation table by Public Enterprises Minister Pravin Gordhan in a bid to avert a crippling strike by workers.

In June, the National Energy Regulator (Nersa) has approved R32.69-billion for Eskom’s multi-year price determination Regulatory Clearing Account (RCA) applications – funds Eskom must recover due to an electricity shortfall or an escalation in operating costs.— Fin 24

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertising

Inside Facebook’s big bet on Africa

New undersea cables will massively increase bandwidth to the continent

No back to school for teachers just yet

Last week the basic education minister was adamant that teachers will return to school on May 25, but some provinces say not all Covid-19 measures are in place to prevent its spread

Engineering slips out of gear at varsity

Walter Sisulu University wants to reprioritise R178-million that it stands to give back to treasury after failing to spend it

Lockdown relief scheme payouts to employees tops R14-billion

Now employers and employees can apply to the Unemployment Insurance Fund for relief scheme payments
Advertising

Press Releases

Covid-19 and Frontline Workers

Who is caring for the healthcare workers? 'Working together is how we are going to get through this. It’s not just a marathon, it’s a relay'.

PPS webinar Part 2: Small business, big risk

The risks that businesses face and how they can be dealt with are something all business owners should be well acquainted with

Call for applications for the position of GCRO executive director

The Gauteng City-Region Observatory is seeking to appoint a high-calibre researcher and manager to be the executive director and to lead it

DriveRisk stays safe with high-tech thermal camera solution

Itec Evolve installed the screening device within a few days to help the driver behaviour company become compliant with health and safety regulations

Senwes launches Agri Value Chain Food Umbrella

South African farmers can now help to feed the needy by donating part of their bumper maize crop to delivery number 418668

Ethics and internal financial controls add value to the public sector

National treasury is rolling out accounting technician training programmes to upskill those who work in its finance units in public sector accounting principles

Lessons from South Korea for Africa’s development

'Leaders can push people through, through their vision and inspiration, based on their exemplary actions'

Old Mutual announces digital AGM

An ambitious plan to create Africa’s biggest digital classroom is intended to address one of the continent’s biggest challenges — access to education

The best local and international journalism

handpicked and in your inbox every weekday