Eskom reports $1.4 B net loss due to challenges

South Africa: Eskom recorded a net loss after tax of $1.4 B (R20.7 B) for the year and EBITDA of $2.1 B (R31.5 B).

According to the power utility, the EBITDA (earnings before interest, tax, depreciation and amortisation) margin declined to 17.5 %, mainly due to increased primary energy and employee benefit expenditure, combined with largely-stagnant revenue growth during the year.

On the positive side, the company reported that progress was made in cleaning up the prior year audit modification relating to the completeness of irregular, fruitless and wasteful expenditure and losses due to criminal conduct.

Eskom noted that its access to funding in both the domestic and foreign markets has been restricted due to decreased investor confidence, as a result of reputational damage owing to the audit modifications in the 2016/17 and 2017/18 financial statements related to the completeness of irregular expenditure, previously reported governance issues, ongoing operational challenges, as well as uncertainty regarding our proposed restructuring.

As a result of the extensive challenges confronting the organisation, Eskom has embarked on a comprehensive strategic review to develop a turnaround plan that would put the organisation on a path towards achieving structural, financial and operational sustainability.

Source: ESI Africa