Eskom’s interim financials revealed a decline in all financial metrics compared to those of the same period for the previous financial year.
Eskom’s sales revenue declined by 2% to R95.5-billion, operating costs remained flat at R66.7-billion, net cash generated from operations declined by 30% to R22-billion, net finance costs increased by 53% to R10-billion, and net profit after tax declined by 34% to R6.3-billion.
Eskom’s financial position for the second half of the financial year ending 31 March 2018 traditionally worsens significantly, with lower sales revenue and higher maintenance costs than in the first half.
Eskom’s year-end financials are therefore expected to reflect a significant net loss position.
The release of Eskom’s interim financial results follows the recent liquidity crisis at the utility, the downgrade of Eskom’s credit rating by ratings agency, Moody’s, from B1 to Ba3, and concerns by banks, financial institutions and lenders in respect of the “going concern” status of Eskom.
The liquidity crisis was attributed to poor leadership and governance by the previous Eskom chairman, board and executive management.
Perceptions of maladministration and corruption by the financial community also lead to difficulties in Eskom rolling over existing debt, obtaining bridging finance and raising new debt.