Eskom says year net profit R3,4b

JOHANNESBURG – South African state-owned power utility Eskom Holdings posted net profit of 3,4 billion rand for its 2006/07 financial year, the company said on Thursday.

Eskom, the world’s lowest-cost electricity producer, said profit, excluding embedded derivatives, for the year to end-March was down slightly on the 3,7 billion rand recorded in the previous year. The company has announced plans to spend billions of rand to upgrade old infrastructure and build new plants to meet fast-growing demand that has already led to power failures in some parts of the country.Eskom CEO Jacob Maroga told reporters supply was tight, with the company’s reserves margin at between eight and 10 per cent rather than the desired 15 per cent, leaving users at risk of more load shedding and outages over the next five to eight years.The government has warned that electricity prices will have to rise sharply to help fund a spending programme of roughly US$20 billion to improve infrastructure and shore up capacity.But Maroga said prospects for the company looked solid.Nampa-ReutersThe company has announced plans to spend billions of rand to upgrade old infrastructure and build new plants to meet fast-growing demand that has already led to power failures in some parts of the country.Eskom CEO Jacob Maroga told reporters supply was tight, with the company’s reserves margin at between eight and 10 per cent rather than the desired 15 per cent, leaving users at risk of more load shedding and outages over the next five to eight years.The government has warned that electricity prices will have to rise sharply to help fund a spending programme of roughly US$20 billion to improve infrastructure and shore up capacity.But Maroga said prospects for the company looked solid.Nampa-Reuters