In a statement released on Monday the country’s sole power utility acknowledged media reports relating to its liquidity challenges and financial sustainability but said that it had secured just over half the funding requirements for the current financial year.
The utility acknowledged that the 2.2% tariff increase for FY17/18 presented challenges to the company’s liquidity position for the current financial year however it had undertaken certain financial commitments to ensure sufficient liquidity in line with its funding requirements.
“Cost containment has been one of the key components of our strategy. The company’s cost-cutting measures are bearing fruit, with a saving of R47 billion realised from the FY12/13 to FY17/18,” Eskom said.
Maintaining sufficient liquidity
While Eskom may have secured approximately 56% of the funding requirements for the current financial year to date, it said the execution of the remaining funding requirement is largely dependent on the utility being able to address the constitution of a new board of directors, resolving internal governance related matters, the appointment of a permanent Group Chief Executive and Chief Financial Officer and other executive positions and remedying the issues that gave rise to the qualified audit opinion on the FY17 financial result.
“Eskom is confident that the board of directors and the executive management team with the support of the South African Government will address the above-mentioned issues that have negatively impacted its liquidity. As such Eskom will maintain sufficient liquidity to support its operational and financial requirements,” the utility said.
“We remain resolute that we will fully execute the required funding for the year, albeit under challenging conditions. Our liquidity levels are not at the desired levels; however, they are sufficient to fulfil our commitments,” Eskom’s interim group chief executive Sean Maritz added.