South Africa’s power utility Eskom has announced a net profit after tax of R9.2 Billion for the first half of the 2021/2022 financial year. The interim results on Wednesday covering April 1 and September 30, 2021 reveal a 4,178% rise in profit over the same period last year.
Last year, the power utility company reported only R0.2 billion profit. Eskom’s outlook for the rest of the financial year is not rosy, though, with the power utility indicating that it expects its mid-year profit to swing to a R9.1 billion loss in the six months from October 1, 2021 to March 31, 2022.
In spite of this huge jump in first-half profit, it would be a nearly 52% improvement over Eskom’s previous full-year results.
The power utility attributes the expected decline in financial performance over the second half of the financial year to historically lower revenue, increased maintenance, and RE-IPP use over the period.
In addition to its profitability improvements, Eskom has reduced its debt by a further 15%. The company will also be impacted by its spending on Open Cycle Gas Turbines (OCGTs) due to a low energy availability factor (EAF).
Eskom CEO André de Ruyter had already succeeded in reducing Eskom’s debt by more than R90 billion in less than 18 months since he took the top job at the power utility.
Eskom’s debt currently amounts to R392.1 billion, of which R360.3 is interest bearing. This is compared to R463.7 billion and R420.6 billion, respectively, in September 2020.
Eskom’s sales volumes increased to 100,901GWh (an increase of 8%) following the easing of lockdown restrictions.
The growth reported by Eskom was aided by a 15.06% tariff increase for the 2022 financial year.
During the first half of the 2022 financial year, Eskom received support from the government to the tune of R31.7 billion.
Eskom reported that its generation performance decreased to 427GWh (compared to 443GWh in September 2020), leading to the worst year of load-shedding South Africans have experienced to date.
The power utility said that its transmission and distribution network’s performance is stable and that it is making progress on its new build programme.