Eskom to announce more multibillion-rand losses
Eskom recently received a R59bn bailout from government, but is expected to announce more 'record losses' in the year ending March 2019.
FILE PHOTO: Steam rises at sunrise from the Lethabo Power Station, a coal-fired power station owned by state power utility Eskom near Sasolburg, South Africa, March 2, 2016. Picture: REUTERS / Siphiwe Sibeko
Embattled power utility Eskom is expected to announce annual losses for the year ending March 2019 on Tuesday.
The ‘record’ losses are a clear indication that Eskom is far from getting back on its feet.
It was reported by eNCA that over the last 10 years, electricity prices have increased by a shocking 540%.
Eskom recently received a R59 billion bailout from government, with Finance Minister Tito Mboweni explaining that this will be paid out in two installments: R26 billion in the 2019/20 financial year, and R33 billion in the current and next financial year.
The bailout was seen by ratings agencies, notably Moody’s, as a credit negative for the country, adding more pressure on already scarce fiscal resources.
The International Monetary Fund added to warnings by noting the “subdued pace” of growth was being exacerbated by “a larger-than-anticipated impact of strike activity and energy supply issues in mining and weak agricultural production”.
Moody’s vice-president and senior credit officer Lucie Villa warned that the power utility’s lack of a strategy to wean it off the government teat was exacerbating the problem.
Villa also warned weak tax performance – which Mboweni warned about – in the last fiscal year, coupled with an expectation that economic growth would remain low at 1% in real terms in 2019, also left limited room for adjustment on the revenue side.
It was announced on Monday that Eskom chairperson Jabu Mabuza will be the acting chief executive at Eskom while the board finds a suitable GCEO.
The position of Treasury also needs to be filled at Eskom, after the announcement of André Pillay’s resignation next month.
(Compiled by Nica Schreuder)
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