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Eskom made a R20.5bn loss in 2020 financial year

Utility’s debt rises to R484bn.
Eskom CEO Andre de Ruyter. Image: Moneyweb

South African state power utility Eskom on Friday said it made a net loss of R20.5 billion in its financial year ending in March 2020, down from R20.9 billion the previous year.

But the company, which struggles to power Africa’s most industrialised economy and is reliant on government bailouts, said it expects to make a larger loss of R26.2 billion in the current financial year ending in March 2021.

Read: Eskom gets tough with errant municipalities, grabs cash and land

The expected deterioration is primarily because of the impact of the Covid-19 pandemic on electricity sales, it said in a presentation.

Eskom’s debt rose to about R484 billion from roughly R441 billion a year earlier.

The new debt figure is equivalent to more than 9% of the country’s gross domestic product.

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Debt up by a staggering R 43 billion! Who on earth lends this amount of money to a broke entity. A loss of more than R 20 billion in one year-stunning! Debt service costs running at a superb R 30 bn per annum.

Managed, produced and implemented by the ANC cadres with a special thank you to the offshore consultants(the Guptas) and the local director our former Zupta CFO Jamnadas Gordhan of SAA fame!

Aye SAM, no one investing their personal money, that is for sure. But ask the same as who lent SAA money? Why, SA banks and investment entities who have to shove the money that comes in every month somewhere in order to pick up their handsome bonuses. The Eskom entity cannot repay the money, these executives could not care one jot as they have got their loot and it is safely offshore.

Where are the customers’ yachts?

Consumer PRE-PAID meters are part of the solution.

Councils do not pay Eskom debt. Cutting them off has limited effect….it will merely plunge the affected towns’ economies more into decline…leading to fewer remaining businesses remaining open and paying for power.

All this makes COMPLETE SENSE. AS RW Johnson remarked: SA cannot have both the ANC and a modern, industrialised economy. So in the end, those that can afford it, erect PV-solar/battery systems and get off grid.

Eskom will end up supplying mostly the informal areas, leading to bigger loss ratios (as paying customers have eroded).

But Eskom must still be carried: and it will eventually cost the state (and our income tax) só much, that it cannot be afforded any longer.

Then Eskom will cease to exist. The national grid dies. Wealthier, more affluent SA will continue running on PV-solar. The ‘benefactors’ in informal areas, who’re sitting with either illegal connections or arrear accounts…won’t have power as the grid ceased to exist.

Now you have economic equity: you have to pay for services. No payment = no service. Works like this ALL OVER the world.

Two new phenomenons emerge:
Power pylons & cables being used for (needy) scrap metal.
And special PV-solar security forces/divisions will be raised (to ensure your panels & batteries remain on your property)

The reduced loss! A tremendous achievement by Eskom standards. The 15,000 surplus Eskom staff who somehow got high-paying jobs that were not required – Zuma logic? – must be thrilled with their contribution.

Maybe this is what the end looks like. Eskom is an insatiable Leviathan devouring the purse. Its revenues do not cover its expenses. It’s built a massive debt mountain over the years, and raised the peak again this year. Many of its customers don’t pay for electricity yet it cannot cut them off.

Eskom was created in the 1920s to provide the foundation for industrialising South Africa, i.e. reliable, affordable electricity. It’s electricity is no longer affordable, and not that reliable either. It maintains its monopoly. Employs too many people, and demands electricity price increases far above inflation every year.

It institutes mandatory blackouts to curb demand on a grid that it was supposed to maintain and has a monopoly over. The mandatory blackouts impact the economy (jobs, taxes) and further destroys its own cash flow by not supplying a service to customers who DO pay for their electricity. These customers are switching over to solar, generators, Lithium banks, wind generators reducing their reliance on Eskom in a country with a lot of sunlight and all of it free.

Everyone is talking about restarting the economy, starting large infrastructure projects to “revitalise” and “invigorate” the economy. All of this is hugely dependent on a stable and affordable power supply which Eskom can’t provide.

There is not a single problem at Eskom that there is not a solution for. The government is reaching the end of its own fiscal rope.

We know how this is going to end. The only uncertainty is when. But at least we can’t say we didn’t know.

“The expected deterioration is primarily because of the impact of the Covid-19 pandemic on electricity sales, it said in a presentation.”
LOL!
If demand was at it’s highest they would not have been able to supply anyway…

It’s the same old story, if there’s no payment, theft and bad work ethic the company is doomed e.g. Eskom, SABC, Municipalities, SAA, the list goes on. The sooner it’s realized that the few who do pay can’t continue to carry everybody that doesn’t the better! Similarly, fewer and fewer tax payers left in “mahala land”

End of comments.

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