By Promit Mukherjee and Anait Miridzhanian
JOHANNESBURG (Reuters) -South African state power utility Eskom forecast a significant narrowing of its net losses in the financial year to March 2025 on Tuesday, but after only a marginal drop for this year.
Eskom’s interim CEO Calib Cassim told a press conference that the company was likely to post a net loss of 23.22 billion rand ($1.24 billion) for the year ending March 2024.
“March ’24 should be the last year we have significant losses. It should then drop significantly in 2025,” Cassim said.
Eskom reported a 23.94 billion rand loss for its last financial year, which ended in March 2023.
The 100-year-old company, which has reported losses for six straight years, is South Africa’s monopoly power supplier and relies heavily on a fleet of 15 coal-fired plants to power the continent’s most advanced economy.
Years of corruption, lower tariff hikes, and poor collection from municipalities have left the utility with a huge debt burden, limited money for maintenance of ageing plants and forcing it to implement daily power cuts.
Eskom has implemented outages of sometimes up to 10 hours a day, curbing economic growth and fuelling public frustration, although lately, they have been reduced to 2 hours a day.
Cassim said Eskom’s continued high net loss will be largely the result of lower volumes of electricity produced, high diesel spend and unpaid dues from municipalities, which will show early signs of improvement in 2024.
The government has started releasing money it pledged in February to take on more than half of its debt to bolster its finances and ramp up maintenance of plants to shore up output.
Eskom’s focus was to continue with an operational recovery that will improve financial recovery, curb corruption and criminality, and separate its transmission and distribution businesses into separate entities, Cassim said.
The separation of the transmission company will be completed before end of March 2024, he added.
“The time for excuses for Eskom and the staff is over. We now need to deliver for the organization and the country”.
($1 = 18.7743 rand)
(Reporting by Promit Mukherjee and Anait MiridzhanianEditing by Alexander Winning and Alexander Smith)