[UPDATE] Eskom profits down by 34%, debt sitting at over R300bn

New acting CEO Phakamani Hadebe says what the media has been writing about is correct, as Eskom faces significant financial challenges.

FILE: Acting Eskom CEO Phakamani Hadebe (left) at the announcement of the company's interim results on 30 January 2018. Picture: Gia Nicolaides/EWN

CAPE TOWN/JOHANNESBURG - Eskom’s profits are down by 34% and the utility’s debt is sitting at over R300 billion.

The power utility was forced to publish its interim financial results on Monday to avoid its bonds being suspended by the JSE by end of business on Tuesday.

New acting CEO Phakamani Hadebe says what the media has been writing about is correct, as Eskom faces significant financial challenges.

For the six months ending in September 2017, Eskom had R9 billion of liquid assets compared to R30 billion a year earlier.

Profits are down on the back of declining sales and higher finance costs.

Hadebe has blamed poor leadership for the position Eskom finds itself in.

“We are here because of poor leadership across the whole spectrum of Eskom. Decisions that were meant to be taken, were not taken."

Eskom says it’s doing everything it can to address governance issues so that it can increase investor confidence and raise funds.

POSITIVES FOR ESKOM

Eskom’s newly appointed chairman Jabu Mabuza says while all financial indicators have declined, the business has sustained excellent operational performance.

Mabuza says despite some of the serious financial challenges, there have also been positives.

“The business has sustained excellent operational performance, including successfully increasing capacity through its new build capacity expansion programme. Good progress has been made in solving the audit qualification issue in the past financial year.”

BROWN COMMITTED

Public Enterprises Minister Lynne Brown says she remains resolute in her efforts to turnaround Eskom.

Despite the appointment of a new board more than a week ago, credit rating agency Moody's has still downgraded the power utility, citing liquidity concern.

Brown's remarks before Parliament's Public Enterprises Committee, came as Eskom was preparing to announce its mid-term results on Monday.

Brown says following the appointment of a new Eskom board, the company is already seeing investors and lenders reviving their commitment to it.

The committee also heard Eskom is looking to fill the position of chief financial officer, following the resignation of Anoj Singh last week.

“The only way to get to bottom of the sewer on allegations of malfeasance, and to restore public and investor confidence in our SOCs (state-owned companies), is to diligently investigate them.”

The department is currently vetting applicants and nominees for arms manufacturer Denel. Brown says plans are underway to rotate the boards at other SOCs.

She says a major priority for her department this year will be to ensure that board members possess the requisite skills and capacity to provide effective leadership.

(Edited by Shimoney Regter)