Eskom profit plummets 89%

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ESKOM Holdings SOC Ltd’s first-half profit plunged 89% and the situation at the South African state-owned power utility is likely to worsen in the next six months, chairman Jabu Mabuza said.

Profit plunged to R671 million ($48 million) in the six months through September from R6.3 billion a year earlier, while finance costs rose to R15.2 billion from R11.9 billion, the company said in a presentation in Johannesburg on Wednesday.

The company’s debt burden is “impossibly high,” Mabuza said, even as it reported improved liquidity and announced that 73% of funding for 2018-19 is secured. “We’re not selling enough electricity” to recover costs, he said, saying sales volumes dropped 0.8% in the period.

“Eskom is in a state of severe financial difficulty.”