South Africa’s Eskom Holdings is on track to post its seventh consecutive full-year loss as the utility crumbles under the weight of its debt pile and high financing costs, poor plant performance and a ballooning municipality arrears book.
The state-owned electricity provider posted a 1.62 billion-rand ($85 million) interim profit in the period through Sept. 30, from a prior 3.8 billion-rand profit a year earlier, the company said in a statement posted on its website on Wednesday.
The losses present another strike to Eskom, which desperately needs to reduce its debt and has survived on the back of taxpayer funds. Earlier this year, the National Treasury allotted a 254 billion-rand debt-relief package to deal with some of its 400 billion-rand debt. Despite the support, Eskom’s debt sits at 408.62 billion rand, 6% more than a year earlier.
Eskom’s operational struggles have rendered the 100-year-old company, which generates power from some 15 coal-fired plants, unable to provide sufficient power to meet the country’s demand, forcing it to ration electricity in a program known locally as loadshedding. The resultant erratic electricity supply has hurt the economy and pushed businesses and households to seek alternative power, in turn crimping sales and affecting revenue generation.
Electricity revenue rose 10% to 164.16 billion rand, Eskom said.
Falling sales place the monopoly in an even more precarious position financially. While operational performance has been showing slight improvements over time, it has not been enough to remedy the poorly maintained generation units that still necessitate the implementation of power cuts.
Debt securities and borrowings increased to 442.7 billion rand.