Eskom assures on debt

Cape Town - Troubled electricity utility Eskom used its results, first released on Tuesday but released to the financial markets on Thursday, to assure financial markets of its continued ability to service its debt by revealing marginally improved earnings before interest, depreciation, tax and amortisation R25.2 billion in the 2014/2015 financial year, up from R 25.1 billion.

The parastatal said its primary energy costs rose 19 percent, while operating costs were contained to 2 percent year-on-year, partly due to cost saving measures, which realised R9 billion.

“We have communicated for some time that the national power system is constrained due to the lack of available generating capacity,” the electricity supplier said.

Eskom noted how it has had to resort to the use of expensive diesel powered Open Cycle Gas Turbines and independent power producers, and on the demand side, rationing power to large users combined with energy efficiency measures.

“When we could not meet demand, we had to resort to controlled, rotational load shedding,” Eskom said.

The power utility noted this in an observation that would be of little comfort to South Africans.

Eskom added in a claim that may be met with some incredulity, that “notwithstanding this, we still supplied electricity to an average of 96% of the country when load shedding was implemented in stage 1”.

Electricity revenue rose by 6.9 percent from R138.3 billion to R147.7 billion while profit for the year halved from R7 billion in 2014 to R 3.6 billion this year.

Cash generated rose from R23.6 billion to R27.3 billion while borrowing increased form R254.8 billion to R297 billion, with R49.5 billion raised from Eskom’s borrowing programme.

The beleaguered parastatal said it would raise funding to maintain liquidity, minimise the impact of loadshedding and unplanned maintenance, and in the medium term work to bring new capacity on stream.

ANA

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