Eskom postpones interim results after tariff knock

Johannesburg - Eskom has postponed its interim results announcement until early next year in order to study the effect its granted tariff hike will have on its finances.

It said its newly-appointed board members will now review the financials.

Last week the National Energy Regulator of South Africa (Nersa) declined Eskom's request for a 19.9% hike, instead granting the utility 5.23% hike. Nersa approved an allowable revenue of R190bn, resulting in an average percentage price increase of 5.23%.

Eskom is assessing the impact of the lower than anticipated tariff increase for the 2018/19 financial year, Eskom stated on Thursday and will not be able to release its interim results just yet. 

“Eskom will release the results as soon as possible to ensure effective business continuity,” said acting Chief Financial Officer Calib Cassim.

The 5.23% tariff increase, announced by the regulator last Friday, is closely aligned with inflation in the country, as measured by the increase in South Africa's consumer price index (CPI).

The regulator conducted country-wide hearings at the end of November on whether the cash-strapped state utility should be granted a 19.9% hike. Eskom's struggle with liquidity also came to light during the same period.

Nersa received more than 23 000 submissions on the subject, with widespread opposition against the proposed hike. 

But despite the flood of opposition at the hearings, Eskom did not back down from its original request, emphasising that it was necessary to help keep it afloat. 

Fin24 and EE Publishers reported in November that Eskom only had R1.2bn in liquidity reserves by the end of the month.

On Friday, Eskom chairperson Zethembe Khoza denied reports that the power utility will be unable to pay January 2018 salaries to its staff. He promised the board would release the delayed interim results before the end of December.

Last month Cassim made a desperate plea on the last day of the hearings, saying that a hike in line with CPI, as requested by countless organisations, simply was not sustainable and that Eskom needed the 19.9% to stay afloat.

“Eskom is not financially sustainable with a CPI price increase as this would imply an average price increase of 4%," he said. 

He said that South Africans would ultimately have to choose between a bailout and the tariff hike if it wanted the power utility to survive the coming storm.

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