Eskom forecasts loss of more than 11.2 billion rand despite recovery

JOHANNESBURG – The troubled South African energy group Eskom expects Wednesday a pre-tax loss of more than 11.2 billion rubles ($ 800 million) during the current fiscal year, despite a recovery plan intended to strengthen its finances.

Eskom, the largest public service in Africa, reported a profit of 671 million rand in the six months to end September, but said its results over the next six months would be jeopardized by a wage deal with unions and higher maintenance costs.

"Eskom is experiencing serious financial difficulties," Eskom president Jabu Mabuza said at a press conference. "In its current state, Eskom is not sustainable."

President Cyril Ramaphosa has appointed a new board of directors in Eskom earlier this year, one of his first decisions since the replacement of Jacob Zuma at the head of the ruling African National Congress.

But efforts to revive the energy company have been hampered by severe budget constraints, labor unrest and coal shortages at many of the company's power plants.

Eskom announced a profit of 6.3 billion rand in the first half of 2017/18 fiscal year, before falling to a loss of 2.3 billion rand for the entire year. .

It supplies more than 90% of South Africa's energy, making it a critical contributor to the health of the $ 340 billion economy.

Eskom said Wednesday that its total debt reached R4.19 billion at the end of September, against $ 367 billion a year earlier. Its liquidity rose from 8.5 to 17.3 billion rand over the same period, but is expected to be under pressure in the second half of the 2018/19 financial year.

"If significant progress has been made so far to stabilize Eskom, we will continue the clean-up campaign," Mabuza said, adding that officials involved in corruption cases had been deported and that a new long-term strategy was being discussed with the government.

He added, "Our destination is a transparent, profitable and agile financially independent organization."