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The low financial ratios, the reduced production performance and the low levels of coal stocks have once again revealed the spectrum of load shedding for the Eskom spower production company.
Chief Executive Phakamani Hadebe, who announced the interim financial results for the six-month period ended September 30, warned that even though liquidity had improved, the state-owned company remained a "focused entity". debt "facing serious financial difficulties.
Hadebe said several problems were contributing to the current financial situation, including the rapid increase in municipal debt and low coal supply.
Pre-tax earnings dropped from R8.9 billion in September to R1 billion, while municipal debt went from R13.6 billion in March to R17 billion, the Parliament announced in November.
Net profit dipped 89% to 671 million euros, against 6.3 billion last year.
Coal supply
Insufficient supply of coal continued to put pressure on Eskom's business, mainly due to Tegeta-related difficulties, after the company owned by Gupta failed to comply its supply obligations and has been placed under economic control.
"The last six months have been a difficult time for Eskom (…), with a steady decline in coal levels putting at risk the company's ability to keep the light," said Hadebe, adding that "we are a debt-dependent entity ".
Load shedding is not excluded
"Given the current challenges, load shedding can not be ruled out," he said.
According to Eskom, most of the financial ratios have deteriorated and are expected to worsen by the end of the year, along with the impact of this year 's wage settlement on the finances of the company. business.
Other losses were expected for the current fiscal year.
"The impact of the wage settlement will be fully felt over the next six months," said the electricity company.
The company said it obtained 73% (52 billion euros) of its required financing for 2018/20 and that the rate for 2019/20 was 22%.
Hadebe said Eskom's liquidity problems were due to weak pricing, declining sales volumes and rising cost base.
The electricity company said cash inflows from operating activities were not enough to cover debt service, the funds raised covering capital expenditures and debt.
Eskom said it was necessary to raise rates to recover costs because it sold electricity at a lower rate than production.
The entity challenged the decision of the South African National Energy Regulatory Authority to grant it a 5.23% tariff increase.
A government guarantee mechanism of 350 billion rand was extended to Eskom, with 252 billion rand used for withdrawals, he said.
Eskom announced Tuesday that it has signed a loan agreement with the African Development Bank Group for R2.8 billion and $ 25 million, for a total amount of more than R3 billion. The sum of $ 25 million amounts to about 347 million rand at current exchange rates.
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