Eskom made its biggest loss ever in the last financial year.
- Several state-owned enterprises remain in deep trouble, a National Treasury briefing to Parliament shows.
- Eskom suffered its worst loss yet.
- But SAA turned a profit, unaudited results show.
- For more financial news, go to the News24 Business front page.
Eskom made a whopping R21.2 billion loss over the past financial year, its largest ever, unaudited results disclosed by the National Treasury in Parliament showed.
On Tuesday, the Treasury presented preliminary outcomes for state-owned enterprises and government departments for the fourth quarter of 2022/23 to Parliament’s Standing Committee on Appropriations.
Eskom’s loss for the year comes despite a 9.61% tariff increase and an R21.9 billion bailout from the Treasury. It earned less revenue than anticipated and spent more, especially on diesel (R21.36 billion) which was more than double the previous financial year. Its debt stock swelled to R439 billion – about a 10% increase over the year – due to the weakening rand and borrowing activities.
Eskom has said it hopes to extricate itself from financial difficulties this year through a much higher tariff – an 18.6% increase – and a large debt bailout over the next three years of R254 billion.
READ | Budget 2023 | Huge bailout for Eskom to come with strings attached
The Treasury also reported on the position of other state-owned enterprises. The SA Post Office, which is in provisional liquidation, made a loss of R2.1 billion despite receiving a government subsidy of R452 million and a Treasury bailout of R2.4 billion in the February budget.
On the upside, SAA was now profitable and no longer technically insolvent. In the year-to-date, the company (including its subsidiaries) made a profit of R500 million. Mango, which is in business rescue, was the only subsidiary that did not make a profit.
State arms manufacturer Denel also improved its financial position thanks to an R3 billion bailout in 2022 to pay debt and the realisation of the medical aid surplus and some asset sales. The company must abide by the Treasury’s condition to sell additional non-core assets to access the full bailout.
The Treasury did not provide the preliminary financial outcome for Transnet, which is known to be in deep distress. Transnet received R5.8 billion from Treasury in October 2022, a fraction of what it needs to achieve sustainability. Treasury said that as a condition of the R5.8 billion, it must submit to an independent review of all its freight corridors and port operations.
When it came to government departments, two overspent their budgets. Statistics SA overspent by R798 million, which amounted to 26.6% of its budget due to the census, and the Department of Defence by R2.98 billion mainly on personnel costs, which amounted to 5.8%.
The biggest under-spender by far was the Department of Social Development, which overestimated the number of people who would be eligible for the R350 Social Relief of Distress grant following the introduction of stiffer criteria. At the close of the financial year on 31 March, the department had R6.4 billion in hand.
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