Johannesburg - Eskom said it lost R9.7bn in its last financial year - a stunningly poor performance that will raise questions about its ability to repay loans, roll out its projects and keep the country's lights on.
The loss amounted to almost R13bn before tax settlements.
Eskom blamed the loss on high coal costs and lower sales. The R9.7bn loss compares to a restated loss in the 2008 financial year of R223m. Company debt ballooned to R50bn from R15bn only a year earlier.
Eskom chairperson Bobby Godsell said the organisation wanted to save R22bn that would see it break even in the current financial year.
During the last financial year, Eskom sold 214 850 Gigawatt hours of electricity, 4% lower than in 2008.
However, the main cost-push factor was buying coal on short-term contracts after it ran down its stockpiles to just a few days' worth of stock. The price of short-term contracts can be up to three times higher that of longer term ones.
"Last year was all about recovery, making sure we can keep the lights on," said CEO Jacob Maroga. "We were in a period of recovery with coal and generation performance."
The company spent R30bn on its new power station building programme, compared to R18bn the previous year. It said it has installed generation capacity of 1 770MW in the year, compared to 1 061MW.
A more pressing issue for Eskom is plugging its R80bn funding deficit for infrastructure projects.
High electricity tariff increases - it was awarded a 31.4% hike earlier this year - in the past two years and a government loan of R60bn over the next three years have helped fund Eskom's budgeted R385bn infrastructure spend.
"If we get similar tariff increases for the next two years, the funding deficit will be R80bn," said Godsell. "We've got to get tariffs at the right level."
Godsell said Eskom will have no choice but to delay some of its infrastructure spend if it cannot find any additional funding.
However, he said none of the four major power stations, like Medupi and Kusile, will be halted or stopped as a result of the deficit. Others less significant might be delayed.
- Fin24.com