Eskom reports R20.7bn loss for last financial year

Eskom on Tuesday announced a whopping R20.7 billion net loss after tax for the financial year ended March 31, up from R2.3 billion the previous year, the biggest financial loss for corporate South Africa in years.

Shortly after his appointment as acting CEO of power utility Eskom, Jabu Mabuza delivered his speech on the struggling energy utility’s financial results for the year ending March 31 2019.

“Today Eskom releases results that, while expected, are unfavourable. The organisation disappointingly incurred a net loss after tax of R20.7 billion for the year,” Mabuza said. 

This is “a significant increase from the R2.3 billion loss experienced in the previous year coupled with an audit qualification on PFMA compliance”, Mabuza added.

This comes after Finance Minister Tito Mboweni last week announced a R59 billion bailout for Eskom from government to be paid in two instalments: R26bn in the 2019/20 financial year followed by R33bn in the 2020/21 financial year.

Mabuza said at the briefing that Eskom’s poor performance should not be seen as a reflection on outgoing CEO Phakamani Hadebe’s tenure.

“With this being Phakamani’s [Hadebe] last results presentation, I would rather ask him to later give a detailed account of the results being a reflection point for his tenure at Eskom. By that, I by no means suggest that these unfavourable results are a sum total of his performance. In fact, far from it,” he said.

“The board of Eskom is mindful that our challenges cannot be solved in isolation, and neither can they be solved overnight. These require a partnership approach from all stakeholders where difficult choices have to be made with the aim of achieving sustained success,” he continued.

Before Hadebe made his presentation, Mabuza added that the Eskom board was committed to implementing its turnaround strategy.

“We as a board are committed to achieving our turnaround plan,” Mabuza said.

As for his recent appointment as CEO, while remaining chairperson of Eskom’s board, Mabuza said he “availed” himself to the position for three months.

“This is not a position I would have applied for but I do it out of service because I love my country,” he added.

Mabuza’s appointment has been questioned, with the EFF releasing a statement calling it “irregular and possibly unlawful” earlier on Tuesday.

(Compiled by Kaunda Selisho. Additional reporting, Daniel Friedman and ANA)

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