Eskom Loss Widens to $1.2 Billion After Record S. Africa Outages

(Bloomberg) -- South Africa’s struggling power utility, Eskom Holdings SOC Ltd., reported a 23.9 billion-rand ($1.2 billion) annual loss after subjecting the country to record electricity outages.

The net loss after tax in the 12 months through March widened from 11.9 billion rand in the same period a year earlier, interim Chief Executive Officer Calib Cassim told reporters at a briefing in Johannesburg on Tuesday.

Eskom began intensifying power cuts in the fourth quarter of 2022, with inhabitants of Africa’s most industrialized economy being subjected to outages of up to 12 hours a day. The company spent more than $1 billion in the last financial year running its diesel-powered units as its fleet of coal-fired facilities experienced frequent breakdowns.

The reliability of Eskom’s grid has worsened in recent years, leading President Cyril Ramaphosa to declare an energy crisis, bolster a government process to buy power from private producers and create the unprecedented role of an electricity minister. The results of the program have been limited, with the auctions delayed and limited because of grid constraints and ongoing rolling outages.

The government has also struggled to appoint someone to lead the utility.

Former CEO Andre de Ruyter announced in December that he would step down because of a lack of support that made his job untenable. He planned to stay on until March, but left early after the airing of a television interview in which he linked ruling African National Congress officials to widespread corruption at the company. The position has been temporarily filled by Cassim, who moved over from his role as chief financial officer. 

Public Enterprises Minister Pravin Gordhan, who oversees the state-owned company for the government, has said the utility will have a new CEO by the end of the year.

There have been some positive developments for Eskom’s financial standing: the government this year began implementing a 254 billion-rand debt-relief package.

©2023 Bloomberg L.P.