Eskom records R55bn loss, but there is light at the end of the tunnel

Eskom has cited a once-off accounting adjustment relating to the spinoff of its transmission business, high diesel costs, and rampant electricity theft for the massive R55 billion after-tax loss for the year ended in March 2024.

Reporting its 2023/24 financial results on Thursday, the utility said that its 2024 financial year was “exceptionally challenging, operationally and financially.”

“Challenges”

Eskom said the period marked one of the “most challenging moments in the history of the company” given the urgent need to deliver on the Generation Recovery Plan to address South Africa’s energy crisis.

The utility said that this was required to deliver a structural improvement in generation performance and end load shedding, which consumed management focus to set the organisation up for improved performance in the future.

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Better 2025

However, the results were not all that grim.

Eskom also updated the market on its more recent performance, with the unaudited results for the first six months of the current financial year showing a “remarkable improvement, with substantial efficiencies achieved”.

Given the time since the year ended in March 2024, Eskom board chairperson Mteto Nyati said there has been no load shedding during the six-month period, while diesel usage was reduced by R11.9 billion while sales volumes have increased by 4%.

“Today’s challenging results demonstrate the extremely tough choices we had to take, for which we are experiencing the benefits of today. We have continued to deliver progress and consistency in the diagnostic from two years ago to address the crisis that the current Eskom Board inherited when they took office in October 2022.”

Warning

Eskom Group Chief Financial Officer Calib Cassim said it is encouraging that the utility recorded a lower loss before tax despite the “momentous operational challenges it faced.

“I believe that we have reached a turning point and that the 2024 financial year will be remembered as the year in which we laid the foundation for future success.”

Dan Marokane, Group Chief Executive of Eskom, said the results Eskom employees have delivered under the most challenging circumstances show what the utility is capable of in a reformed market.

However, he warned that cost-reflective tariffs are crucial for its sustainability.

“For South Africa to reap the rewards of these efforts, the migration to cost-reflective tariffs is a crucial step, not just for Eskom’s financial sustainability, but to foster a competitive future electricity supply industry that attracts investment and enables market players to operate and maintain their assets in a reliable state.”

Eskom said it will continue to focus on implementing the Generation Recovery Plan, strengthening governance, and tackling crime, fraud, and corruption while future-proofing the organisation to enable energy security, growth, and long-term sustainability.

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