Eskom Set To Report Heavy Losses

South African state electricity supplier Eskom will next week report heavy financial losses, expected to stand at around R25 billion. 

The amount is unmatched by any other private or public company in the country.

The losses at the ailing state utility have been worsened as a result of rising labour costs. Trade unions secured a wage increase nearly double the rate of inflation in addition to bonuses in 2018. Eskom also faces high maintenance expenditures as a result of its ageing infrastructure. 

Government has announced a bailout of R59 billion for the utility, which has debts of almost R500 billion. However, ratings agency Moody’s has warned that without an accompanying plan to restructure and stabilise the company the additional support would be “credit negative” and could prompt a downgrade of the country.

Eskom has this week indicated that it has started the process of appointing financial advisors to assist it with the planning for the government support package. However, it is yet to indicate any progress in the search for a new chief executive following the resignation of Phakamani Hadebe.