Eskom reports R12.2bn profit

Cape Town - Eskom reported a profit of R12.24bn for the six months ending September 30 2013, but warned that it will be somewhat eroded in the second half of the financial year.

First-half profit declined marginally from R12.63bn in the same period last year due to increased operating costs.

It said on Thursday that revenue in the first half of the 2013/14 financial year increased 6.1% to R77.8bn as electricity tariffs rose.

Revenue per kilowatt hour sold increased to 69 cents, compared with 64.9c in the same period in the previous year, while operating costs rose to 55.3c from 47c.

Primary energy costs increased by 25.3% from 22.5 c/kWh (September 2012) to  28.3 c/kWh in the review period mainly due to higher coal costs (up 13.3%) and as a result of the utilisation of open cycle gas turbines (OCGTs) the cost of which increased by R2.3bn.

However, the parastatal said this benefit was offset by escalating operating expenditures mainly due to an increase in primary energy costs.

“The story during this period is one of co-operation and resilience,” outgoing chief executive Brian Dames said in a statement.

Eskom announced on Thursday that Dames would step down in March next year.

“Despite a highly constrained system, we’ve taken significant steps with our partners to avoid rotational load-shedding and we are addressing the tariff constraints in every aspect of our business,” he said.

Eskom said the second half of the financial year falls within the summer season, during which it records lower sales and maintenance expenditure.

Eskom acting chief financial officer Caroline Henry said the utility is actively managing its finances, adding that it raised $1bn (R10.5bn at the current rand/dollar exchange rate) through an international bond issuance.

“The bulk of funding required for the new-build programme has been identified and secured.

"Eskom will require robust income far beyond the new-build programme as the debt we incurred to fund these projects will have to be paid off over the next few decades,” said Henry.

Eskom chairperson Zola Tsotsi said: “We’ve kept the lights on thanks to the efforts of the private sector, the public, and thousands of dedicated Eskom employees.”

 - Fin24

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