Eskom's South Africa sees its annual profit match last year after a strong first half

Eskom, the South African power utility, said that it expects this year's profits to be similar to those of last year. This is after a good first half-year helped by higher rates and lower financing costs.

Eskom's profit was 16 billion rands after taxes last year. This is its first profit for a full year in eight years. The profit came after Eskom drastically reduced the number of recurring blackouts, which have been holding back Africa's largest economy for over a decade.

A multi-year bailout by the government and a dramatic turnaround in performance at its coal-fired energy stations have been key factors in its financial recovery.

Eskom made a profit of 24.3 billion rand (1.4 billion dollars) in the first six months of the current financial year. This coincided with winter months in the Southern Hemisphere, when Eskom sells a lot more electricity and performs less maintenance on its plants.

Eskom stated that the results showed that last year's profits were not an isolated event.

The average tariff increased by 12.7%, helping to boost revenue to 191.3 billion rand in the six-month period ending September.

Due to lower interest rates, and debt levels, net finance costs dropped by 14% to 15,3 billion rand. The amount of money owed to struggling municipalities has increased from 90.1 billion rand in the previous year to 105 billion.

Eskom reported that power cuts only occurred on four days during the six-month period covered in its latest results. When power cuts in 2023 reached record levels, outages occurred on more than 300 of the 365 days.

Former state monopoly still dominates the electricity market in the country. It generates most of its power through coal-fired facilities, but also has a small number of smaller plants that use diesel or water to produce energy.

(source: Reuters)