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Johannesburg - Power utility Eskom on Tuesday reported a rise in revenue to R51.1bn for the six months ended September 2010 from R38.3bn a year ago, which included a small portion of non-electricity revenue.
It reported a rise in operating profit to R15.1bn from R2.4bn.
The group substantially improved its net profit to R9.5bn for the first half from R1.1bn, thanks to tariff increases.
Eskom said its financial results were seasonal, with substantially higher surpluses traditionally earned in the first half of the financial year, which included the higher tariffs and the high demand winter months when maintenance was low.
Operating profit, before fair value gains and losses on embedded derivatives and net finance costs, climbed to R16.6bn from R8bn.
"The improved financial performance for the six months to September 30 2010 must be read in the context of the seasonality of Eskom's business, the 24.8% tariff increase granted by Nersa (the National Energy Regulator of SA) with effect from April 1 2010, as well as cost savings achieved," Eskom said.
The utility said it had returned to full-year profitability in March 2010.
Tuesday's interim results were the first for Eskom, which said it wanted to move "towards greater transparency and accountability".
CEO Brian Dames said the strong financial performance reflected a combination of higher revenue as Eskom moved towards cost-reflective tariffs, higher GWh sales and a significantly reduced loss on embedded derivatives on a period-to-period comparative basis.
“Eskom has moved away from recovery mode and is now laying a foundation for sustainable growth. We have a new strategic direction, the build programme is progressing, our funding plan is in place and these results show we are improving the bottom line.”
Dames said a key aspect of financial sustainability was the fact that tariffs were now moving towards cost reflective levels. Operating revenue per unit of electricity (kWh) now exceeds the operating cost per unit.
“However, the tariff design now includes mechanisms to provide relief for low income households and that has meant that the unit cost of electricity for these households has declined during this period,” Dames said.
Dames noted that while there had been no power supply problems during a cold winter which included the successful 2010 Fifa World Cup, Eskom would only be able to maintain supply in the years ahead with the concerted support of all consumers, from businesses to residential users. He warned that there are still risks which need to be managed.
“We are proud of the fact that we have kept South Africa’s lights on since April 2008, and we are determined to maintain that record, even though supply will be tight up to 2015, and particularly so next year and in 2012, until our large new power stations come on line.”
