Eskom coal

Eskom turnaround strategy starting to show results, thanks to Molefe’s team

No more loadshedding and more than 10% growth in revenue… almost seems to good to be true, but Eskom is on the up thanks to CEO Brian Molefe and his team.

Eskom coal

The utility’s CEO recently revealed their newest stats, showing that not only had the financial situation improved, but that Eskom has also improved on an operational basis.

South Africa has gone 11 months without any loadshedding, and it’s also almost the longest time Eskom’s gone without a shake-up at senior management level… which is likely also a key contributor.

“With new leadership and intensified staff engagements, we have stabilised the organisation. Despite the challenges we face, we continue making progress in the technical and operational areas of the business,” said Molefe, who’s just finished a course in Nuclear Energy for Utility Executives at Massachusetts Institute of Technology (MIT), one of the world’s top 3 universities.

“Through our robust improvement plan, we have risen to the challenge of completing necessary maintenance of our ageing power stations, while delivering on our new build projects, which will add capacity to the grid in the future,” he said.

Ben Ngubane, the utility’s chairperson, has called it a defining period for Eskom.

“The Design To Cost programme contributed to improvements to operational and financial sustainability and to ensure reliable and efficient electricity supply,” he said. 

Some of the newest stats show that Eskom has, in fact, improved in a range of key points:

  • Revenue has increased by 10.6%
  • Their EBITDA increased by 37.4% from R23.3 billion the previous year to R32 billion this year
  • Cost savings exceeded the R13.4 billion target and reached R17.5 billion
  • 57% funding for the 2016/17 year has already been secured

“Financial performance improved against the previous year, and all financial ratios showed improvement due to improved operating results, as well as the conversion to equity of the subordinated government loan and equity injection of R23bn. Operating results also improved due to stringent cost containment measures,” said Molefe.