Eskom’s operational and financial position remains under pressure
28 November 2018
While progress has been achieved in laying the building blocks for a sustainable turnaround of Eskom, the company’s operational and financial performance continued to deteriorate in the six months to the end of September 2018, with the situation expected to worsen before it improves by 2023.
Releasing the company’s interim financial results for the period under review, Eskom’s Group Chief Executive, Phakamani Hadebe, said: “There will be pressure in the short- to medium-term as we transition towards financial and operational sustainability, a move that will require resolute, tough and decisive leadership. Eskom has defined an ambitious turnaround plan, largely within its own control, to improve financial performance by 2023.”
Hadebe said the company is facing severe challenges both operationally and financially. He said Eskom is currently in a debt reliant liquidity situation as a result of low tariffs, limited growth in sales, increased costs, and the rising capital investment programme. In addition to this, the company is facing reduced generation performance, low coal stockpiles, and increases in municipal debt.
“Notwithstanding the above challenges, Eskom’s Board and executive management team have dedicated their efforts on five key priorities to create a platform for future growth. These include addressing poor governance controls; improving liquidity; ensuring a financially viable entity; completing phase 1 of the of the strategic review, and executing a nine-point generation recovery programme.