South Africa‘s struggling state-run power firm Eskom reported a R2.3 billion ($171 million) loss on Monday, underlining the enormity of the task facing President Cyril Ramaphosa, who has pledged to turn the company around.
The utility also reported that it had uncovered about R20 billion of irregular expenditure since 2012, as the firm combs its financials for evidence of wrongdoing. This is almost equivalent to the R22.9 billion that Sars will raise following the 1% increase in VAT, announced in March.
Eskom, Africa‘s largest public utility, was embroiled in corruption scandals under former president Jacob Zuma and narrowly avoided a liquidity crunch early this year after banks halted lending. Zuma has denied any wrongdoing.
It supplies more than 90% of South Africa‘s electricity, and ratings agencies regularly cite its R220 billion of government-guaranteed debt as a threat to the country’s sovereign credit ratings.
Eskom pegged the loss for 2017/18 financial year ending March on increases in financing costs and depreciation compared with a profit of R888 million in the previous reporting period.
“Eskom is undoubtedly facing one of the most difficult times in its history,” Eskom chairman Jabu Mabuza said.
The utility’s executives told a news conference it had R22.7 billion liquidity by the end of the financial year.