Eskom expects minimal improvements in its financial performance in the current financial year, predicting a R23.2 billion loss – compared to a record R23.9 billion loss in the 2023 financial year.
This was revealed by Eskom management in a recent presentation to Parliament’s Public Enterprises Committee.
Acting CEO Calib Cassim lamented the impact of elevated load-shedding on the company’s revenue and its heavy use of open-cycle gas turbines (OCGTs), which are more expensive to run than traditional power stations.
The utility expects to spend R29 billion on diesel this year to run its OCGTs to soften the blow of load-shedding.
Despite this poor performance, Eskom forecasts a substantial surge in revenue and profitability in the upcoming financial years.
The company projects a 15% increase in revenue to R298 billion in 2024 and a 33.7% jump in operating profit before interest and tax to R7.4 billion.
This financial turnaround is attributed to reduced diesel costs, a decline in load-shedding-related revenue losses, and improved municipal payment collection.
Municipalities currently owe Eskom R63 billion, Cassim said. There are hopeful that interventions by the National Treasury will ensure outstanding bills are paid.
Cassim said the expected loss includes Eskom’s receipt of R78 billion in funding as part of the government’s R254 billion debt relief package.
The utility received R16 billion in August and R20 billion in October, with the remaining R42 billion scheduled to be paid over the next five months.
Cassim stressed that the full impact of the debt relief would only be realised after three years when Eskom’s cash flow from operations would be adequate to cover its interest obligations.
Eskom must pay bonuses despite financial woes
Electricity Minister Kgosientsho Ramokgopa said Eskom employees must be paid bonuses to improve staff morale and performance as the utility struggles with “people problems”. This is despite the deep financial hole the company is in.
Eskom has not paid out performance bonuses since 2017, and it is not clear where the money to pay bonuses will come from.
Ramokgopa said he had asked Eskom’s management and board to re-introduce performance incentives for employees at power stations based on the station’s performance.
“Workforce morale was extremely low because there have not been incentives in place for a number of years due to legacy issues and the quality of performance,” he said.
Ramokgopa previously said the supply-demand imbalance is not the only problem at Eskom – “there are people issues there at Eskom”.
These issues have nothing to do with the leadership of Eskom, according to Ramokgopa, but are due to a lack of job security.
With Eskom’s ageing coal-powered fleet slowly being decommissioned, people are losing their jobs, and more jobs will be lost.
To pay for these bonuses, Ramokgopa suggested Eskom use the money saved from a reduction in the use of diesel as the performance of coal power stations has improved.