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THIS afternoon at 12 noon Eskom will announce its latest set of annual results.
I expect it will announce a massive profit of between R5bn and R9bn.
This is based on the company’s interim results for the first six months of the year.
The interim results revealed a profit of R12.6bn. (Thanks of course - in a big way - to stiff recent electricity tariff increases.)
Eskom generally fares slightly worse financially in the second half of the year, therefore I've adjusted somewhat downward. (Please note, these are intial, uninformed estimates.)
Massive profits of course are necessary to enable Eskom to pay the debt incurred on its huge capital expansion programme. At end-September 2012, this gross debt stood at R213bn.
That’s a lot of interest to repay.
A huge issue that will hopefully be addressed is the matter of Eskom’s chief financial officer Paul O’Flaherty. At the interim results, it was announced that he had tendered his resignation and would leave Eskom by July 2013.
This would be a huge blow to Eskom, and the group and the departement of public enterprises have been scrambling to try to get him to remain on board.
Let’s hope they managed to do so.
I expect most people will want to know from the minister (whom I assume will be attending the results) which heads will be rolling for the delay in the build programme.
Malusi Gigaba is on record as promising “heads will roll” if Medupi does not deliver power by December.
I’m hoping cool heads prevail. It would be worse in my opinion, for the build programme as a whole, if senior staff at Eskom were told to ship out. That could delay the project even further.
Under current leadership, Eskom has become a much more stable and predictable company. Only two or three years ago, the company was still reporting massive losses.
That will also not be acceptable.
Still, the biggest current conundrum is that Eskom has announced only on Monday that its build programme has now been delayed by a minimum of six months.
This has led to an additional cost of R10bn - at least.
How will this be factored into the results?
And will management be getting huge bonuses again, like last year when the top ten senior officials at Eskom received R16.9m in bonuses?
These ten officials also took home a neat R29.9m in salaries.
Zola Tsotsi, Eskom chairperson at the time, said the board had decided to pay the bonuses.
“The bonuses were based on the company performance,” Tsotsi said.
This was understandable to a degree, given that the build programme was on track at that time, there had been no load shedding and the group had made huge profits. Also bear in mind that Eskom has to offer market-related packages to senior officials or risk losing them.
But will this kite fly again today, given recent revelations?
We’ll find out later.
- Fin24
*Follow James-Brent Styan on Twitter at @jamesstyan. Views expressed are his own.
I expect it will announce a massive profit of between R5bn and R9bn.
This is based on the company’s interim results for the first six months of the year.
The interim results revealed a profit of R12.6bn. (Thanks of course - in a big way - to stiff recent electricity tariff increases.)
Eskom generally fares slightly worse financially in the second half of the year, therefore I've adjusted somewhat downward. (Please note, these are intial, uninformed estimates.)
Massive profits of course are necessary to enable Eskom to pay the debt incurred on its huge capital expansion programme. At end-September 2012, this gross debt stood at R213bn.
That’s a lot of interest to repay.
A huge issue that will hopefully be addressed is the matter of Eskom’s chief financial officer Paul O’Flaherty. At the interim results, it was announced that he had tendered his resignation and would leave Eskom by July 2013.
This would be a huge blow to Eskom, and the group and the departement of public enterprises have been scrambling to try to get him to remain on board.
Let’s hope they managed to do so.
I expect most people will want to know from the minister (whom I assume will be attending the results) which heads will be rolling for the delay in the build programme.
Malusi Gigaba is on record as promising “heads will roll” if Medupi does not deliver power by December.
I’m hoping cool heads prevail. It would be worse in my opinion, for the build programme as a whole, if senior staff at Eskom were told to ship out. That could delay the project even further.
Under current leadership, Eskom has become a much more stable and predictable company. Only two or three years ago, the company was still reporting massive losses.
That will also not be acceptable.
Still, the biggest current conundrum is that Eskom has announced only on Monday that its build programme has now been delayed by a minimum of six months.
This has led to an additional cost of R10bn - at least.
How will this be factored into the results?
And will management be getting huge bonuses again, like last year when the top ten senior officials at Eskom received R16.9m in bonuses?
These ten officials also took home a neat R29.9m in salaries.
Zola Tsotsi, Eskom chairperson at the time, said the board had decided to pay the bonuses.
“The bonuses were based on the company performance,” Tsotsi said.
This was understandable to a degree, given that the build programme was on track at that time, there had been no load shedding and the group had made huge profits. Also bear in mind that Eskom has to offer market-related packages to senior officials or risk losing them.
But will this kite fly again today, given recent revelations?
We’ll find out later.
- Fin24
*Follow James-Brent Styan on Twitter at @jamesstyan. Views expressed are his own.
