Eskom reports 1st half profit of 12.2 billion rand - CNBC Africa

Eskom reports 1st half profit of 12.2 billion rand

Earnings

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Power lines. PHOTO: Getty Images

Revenue in the first half of the 2013/14 financial year increased 6.1 per cent to 77.8 billion rand as electricity tariffs rose.

First-half profit however declined marginally to 12.24 billion rand from 12.63 billion rand in the same period last year due to increased operating costs.

“The story during this period is one of co-operation and resilience,” said Eskom CEO Brian Dames in a statement.

“Despite a highly constrained system, we’ve taken significant steps with our partners to avoid rotational load-shedding and we are addressing the tariff constraints in every aspect of our business.”

Primary energy costs increased by 25.3 per cent from 22.5 c/kWh in September 2012 to 28.3 c/kWh for the half year to 30 September 2013.

This was mainly due to higher coal costs, which were up 13.3 per cent, and as a result of the utilisation of open cycle gas turbines (OCGTs) the cost of which increased by 2.3 billion rand.

In October, an accident at Eskom’s Ingula power station claimed six lives after a platform collapsed in a 4km deep tunnel.

Since then, an investigation by the Department of Mineral Resources into the cause of the accident is underway.

“We will not waiver on our commitment to Zero Harm. We believe that no kilowatt of electricity can be produced at the expense of human life. We do not want this kind of tragedy to occur in any of our sites”, said Eskom Chairman Zola Tsotsi.

The power utility however explained that its Medupi power plant project is still underway and is expected to produce its first power in the second half of next year.

Eskom’s electrification programme also reported significant growth, with roughly 53, 600 homes having been electrified during the first half of the financial year. This is compared to the 32,216 homes during the same period last year.

“We’ve kept the lights on thanks to the efforts of the private sector, the public, and thousands of dedicated Eskom employees,” said Tsotsi.

“While we continue to walk a fine line between supply and demand, we are making progress and investing in the future.”

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