Eskom posted a R3,6bn net profit for the 2009/10 year, the electricity parastatal said on Wednesday. The previous year the utility had reported a R9,7bn loss.
Revenue had increased by 31% to R71bn in the 2009/10 year from R54bn in 2008/09, the utility said. This was due to an increase in gigawatt hours sold and the National Energy Regulator of SA’s (Nersa) decision in June 2009 to raise tariffs by 31%, Eskom said.
Commenting on the results, Eskom’s finance director Paul O’Flaherty said that the previous year Eskom had sold electricity below operating costs and therefore it had incurred a loss.
The parastatal’s greatest challenge remained its funding gap. “However, we are at advanced stages of solving the issue,” O’Flaherty said. Eskom had researched the international bond market and believed that it offered opportunities.
“We have a government guarantee of R176bn and of that we have utilised R117bn, so there is R60bn left of that guarantee.”
O’Flaherty said the R60bn would be used to “firm up” Eskom’s credit profile. “We must maintain our BBB+ credit rating — it has to be preserved.”
In addition to relying on the international bond market, Eskom also intended to implement internal cost savings of R20bn over seven years. This, however, would not be attained through retrenchments. “We must rather be efficient in the way we do things,” O’Flaherty said.
He stressed that Wednesday’s results were preliminary results. “The full financial statements will be published later.”
He said Eskom was trying to benchmark itself against the very best companies. “That means listed companies … and releasing preliminary results is a norm with them … so we have released these results just to let everyone know where we are.” — Sapa