Eskom increases mid-year profit by 4178%

Eskom’s net profit after tax for the first half of the 2021/2022 financial year is up 4,178% over the same period last year.

The power utility announced its interim results on Wednesday, revealing that it had profited R9.2 billion between 1 April and 30 September 2021.

This is compared to the R0.2 billion profit the power utility reported for the same period in the previous year.

Eskom’s outlook for the rest of the financial year is not rosy, though, with the power utility indicating that it expects its mid-year profit to swing to a R9.1 billion loss in the six months from 1 October 2021 to 31 March 2022.

That said, this would be a nearly 52% improvement over Eskom’s previous full-year results.

The power utility attributes the expected decline in financial performance over the second half of the financial year to historically lower revenue, increased maintenance, and RE-IPP use over the period.

It also expects a significant spend on Open Cycle Gas Turbines (OCGTs) due to a low energy availability factor (EAF).

André de Ruyter, Eskom CEO

In addition to its profitability improvements, Eskom has reduced its debt by a further 15%.

Eskom CEO André de Ruyter had already succeeded in reducing Eskom’s debt by more than R90 billion in less than 18 months since he took the top job at the power utility.

Eskom’s debt currently amounts to R392.1 billion, of which R360.3 is interest bearing. This is compared to R463.7 billion and R420.6 billion, respectively, in September 2020.

Following the easing of lockdown restrictions, Eskom’s sales volumes increased to 100,901GWh over the period of reporting — an increase of 8%.

The growth reported by Eskom was aided by a 15.06% tariff increase for the 2022 financial year.

During the first half of the 2022 financial year, Eskom received support from the government to the amount of R31.7 billion.

The charts above show Eskom’s profitability and solvency between September 2017 and September 2021.

Eskom reported that its generation performance decreased to 427GWh (compared to 443GWh in September 2020), leading to the worst year of load-shedding South Africans have experienced to date.

The power utility said that its transmission and distribution network’s performance is stable and that it is making progress on its new build programme.

Now read: Ex-Eskom employee and contractor nailed for R11 million

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Eskom increases mid-year profit by 4178%