JOHANNESBURG (Reuters) – South African power utility Eskom said on Friday its half year profit fell by nearly two-thirds, driven by rolling power cuts and poor plant performance.
Debt-saddled Eskom has struggled for years to meet electricity demand in the country, plunging Africa’s most developed economy into hours of power cuts, hurting industry output and impacting households.
The state-owned utility’s profit for the six months ended Sept. 30 fell to 3.84 billion rand ($216.5 million) from 10.61 billion rand in the year earlier period.
Winter demand in the months of June to August has been rising for the last few years, forcing Eskom to shut off power plants to prevent grid failure. This in turn hurts its sales and profit.
The government, which has struggled for years to overhaul the power firm, said in February it planned to take on 254 billion rand of Eskom’s 423 billion rand debt as of Sept. 30.
For 2023, Eskom said it would need 60 billion rand for operations, three quarters of which has already been arranged with the remainder to be secured through a private share placement.
In January, South Africa’s energy regulator approved an 18.65% hike in tariffs for the financial year starting April 1.
Tariff increases as well as the debt relief measures will “alleviate pressure” on Eskom’s operating cash flow, the utility said, adding it will enable it to restore the energy availability of the fleet of power stations.
($1 = 17.7341 rand)
(Reporting by Anait Miridzhanian; Editing by Kirsten Donovan)
