Eskom has announced disappointing financial results for the financial year ended March 2020. The power utility says its unsustainable debt burden led to net finance cost of R31.2 billion, which resulted in a net loss of R20.5 billion.
Eskom says it experienced significant operational and financial challenges, resulting in Stage 6 load shedding during December 2019 and further financial assistance from government is still needed.
The power utility’s chief executive officer Andre de Ruyter says the company needs to reduce its debt levels to restore financial sustainability.
“We also had some significant issues relating to the global econ environment relating to the sovereign credit downgrade all against the backdrop of COVID-19. So it was a challenging time, all these happening at the same time but is not all doom and gloom, we are making good progress.”
The power utility also revealed that the country’s municipal debt has gone to more than R28 billion. De Ruyter says the debt went up during March this year. He says the company will soon hold a meeting with a political task team in a bid to find a solution to the problem.
The power utility has previously raised concern about the threat the municipal debt poses to the viability of the company. Last week, de Ruyter said theft and vandalism remain major challenges in the power utility’s efforts to ensure reliable and uninterrupted electricity supply.
The power utility embarked on a communications drive to educate the public about illegal connections, the load reduction drive and other issues impacting the national power grid.
“On the distribution side of our business, we are concerned that there [are] continued illegal activities that affect our grid. At present we are losing about R2.5 billion a year due to electricity theft, illegal connections and meter tampering.”
“Given the constraints of Eskom’s financial statements, this is not a loss that we can accommodate. We have therefore decided to implement load reduction during peak hours in order to protect our assets,” explained de Ruyter.