Eskom profit rises to R5.2bn

Eskom profit rises to R5.2bn
Oct 19 2005

Johannesburg - South Africa's biggest state- owned enterprise, Eskom, reported to parliament on Wednesday that its group profit after tax has risen to almost R5.2bn in the past financial year, government news agency BuaNews reported.
The electricity utility also exceeded its electrification target in the same period, the agency said.

Presenting its annual report to the Portfolio Committee on Public Enterprises, an Eskom executive said that by 2005/06, 3.2 million homes would have been electrified since the advent of democracy in South Africa in 1994 - an average of about 300 000 homes a year.

At the same time, electricity prices in South Africa were among the lowest in the world: they were lower than several highly industrialised countries in North America, Scandinavia and western Europe, BuaNews quoted the report as stating.

Eskom's average price of electricity is currently 16.04 South African cents per kilowatt hour, compared with an average of about 9 US cents (about 59 SA cents) charged in Germany and about 7 cents (about 46 SA cents) charged in the United States.

In terms of scale of activities, the report stated that Eskom was among the top eleven utilities in the world in terms of generation capacity, and was among the top seven in the world in terms of sales.

According to the report, the giant utility's total assets currently amount to 109.2 billion and it employs over 31 000 staff.

However, the chief executive told the portfolio committee that Eskom's costs per new electricity connection were now starting to increase, due to the fact that it was now bringing electricity to more rural areas with low population densities and with greater distances to cover.

The utility would also be greatly expanding its generation capacity - to an intended extra 5,304 megawatts by 2009 - and had projected an increase in capital expenditure of over R25bn by 2009.

At the request of its shareholder, the government, Eskom has changed its financial year from December to March, making this year's reporting period 15 months long.

In the 2005 financial year to end March, Eskom said it spent R157m on corporate social responsibility projects, while it spent R10.3bn on black economic empowerment entities, of which R1.1bn was spent on black women-owned enterprises.

HIV and Aids continue to be a strategic focus area for the utility, which has contributed R83m towards research for the development of a vaccine for the virus.

In terms of Eskom's special focus on voluntary, confidential HIV testing and counselling, it noted an HIV prevalence rate of 8.9% of its employees in 1999.

By 2003 the prevalence rate was therefore predicted to be as high as 13.5% by 2003, but, interestingly, Eskom noted after a follow-up study in 2003 that the prevalence rate stood at a lower figure, of 10.7%, BuaNews said.

Transnet aims for 30% of market
Oct 19 2005 07:01:43:200PM

Johannesburg - Transnet is aiming for a 25-to-30% share of the country's transport and logistics market in the medium-to-long term, chief executive Maria Ramos said on Wednesday.
She was addressing the Johannesburg Press Club.

In 2003 Transnet's subsidiary, Spoornet, held only a nine percent - or R11bn - share of this R135bn market.

Ramos announced the goal ahead of a meeting on Friday with unions on the restructuring of the company.

Transnet will dispose of a number of assets not key to its long-term plan and, along with them, unions fear, a number of jobs.

But where the figure of 25 000 prospective job losses came from Ramos said she did not know.

Workers at South African Airways would retain their jobs even though the company would no longer be a Transnet subsidiary, as would the 9 000 employees of Transnet division Metrorail, which is to suffer the same fate.

Ramos said that as part of the restructuring Transnet intended spending R40bn on capital expenditure in the next five years.

The bulk would go to rolling stock - locomotives and wagons -signalling and maintenance.

Ramos was confident cash flows in the next five years would be sufficient to fund half of that.

Transnet would not be able to be competitive if it could not meet its clients' needs, Ramos said.