Under pressure power utility Eskom saw its profit drop to R9.3 billion for the six months ended September 2014, down 24% from R12.24 billion before.
The group said it needs a substantial cash injection to ease liquidity pressure and to avoid another credit downgrade as it struggles to keep the lights on in Africa’s most advanced economy.
The group increased revenue to R81.9 billion, from R77.7 billion in 2013.
“Eskom finds itself in the most challenging position in memory as a company,” CEO Tshediso Matona said, as reported by Bloomberg.
Financial performance has been “systematically deteriorating,” he said.
Eskom noted that the value of electricity sales improved by 5.4% to R82 billion, while the volume declined, amid labour strikes. Primary energy costs increased 22%.
In June, Eskom reported a net profit of R7.1 billion for the year ended March 2014, up from R5.2 billion in the previous year.
However, it noted that its earnings were significantly less than the R12.2 billion reported for the six months ended 30 September 2013.
The group chief projected a full-year profit of R500 million.
Eskom noted the Minister of Finance announced in the Medium Term Budget Policy statement on 22 October 2014 that government will provide at least R20 billion in funding to support Eskom’s financial sustainability.
“If necessary, consideration will be given to a partial equity conversion of the R60 billion government loan,” it said.
On the weekend, Eskom implemented yet another round of load-shedding, the fourth of the year, while also declaring a power emergency on Sunday.
Earlier this month a coal storage silo at the Majuba power station in Mpumalanga collapsed, resulting in widespread power cuts. The silo held more than 10 000 tons of coal and affected coal supplies to all six units at the power station.
An investigation into the collapsed silo is underway.