Eskom released their integrated financial results on Tuesday revealing one of the worst business losses in South African history. The power utility recorded a loss of R20.7-billion during the 2018/19 financial year.
Shadow Public Enterprises Minister Natasha Mazzone called Eskom a sinking ship. She said that the fact that there is an interim Acting CEO means there is no permanent captain steering the ship through the financial storm.
Public Enterprises Minister Pravin Gordhan announced on Monday that Jabu Mabuza would be taking over as acting CEO for the next three months.
The financial results were released by the outgoing CEO Phakami Hadebe who resigned in May claiming the reasoning was due to his health. His last day is July 31.
Eskom’s top executives took a pay cut in 2019 due to the horrific financial performance of the power utility, however some still received hefty exit packages.
Hadebe will receive a final salary of R8.6-million for his one year at the helm.
Chief financial office, Calib Cassim will receive R3.24-million which is considerable less than his predecessor, Anoj Singh who received R9.4=million in 2018.
Despite Eskom trying to cut back on their 46,665 full time employees through retrenchments the wage bill hit R32.35-billion in 2019, up from R28.83-billion in 2018. this included salaries, overtime, benefits, leave and bonuses.
Eskom’s debt has exceeded R440-billion with municipalities owing R18-billion to the power utility.
The SEO’s earnings before interest, taxes, depreciation and amortisation was down to R31.5-billion for the 2019 year from R45.4-billion in 2018, this was due to increased primary energy and employee benefit expenses, together with stagnant revenue growth.
Mabuza is expected to maintain leadership stability and stated that the debt-laden power supplier is determine to achieve its turnaround plan.
The acting CEO said that they have already achieved some cost savings by reducing the group’s headcount however maintenance costs, the use of expensive diesel, a wage settlement and an increase in municipal debt have negated the savings.
The utility has been given a target of R10.6-billion for the year under review as part of their nine-point turnaround plan which includes cost-reflective tariffs, balance sheet optimisation and business separation.