It said it planned capital expenditure of about $6 billion over the next five years. Eskom reported that net profit rose to $465.4 million in the year to end-December from $662.3 million in 2001. It paid the government a first-ever dividend of $69 million.
Eskom's results are likely to aid government plans to sell 30 per cent of its generation capacity 10 per cent to black empowerment groups by March 2004 and 20 per cent to private investors by March 2005.
Eskom chief executive Thulani Gcabashe said: "The results are recorded on the back of a 3.5 per cent growth in electricity sales during the year, good cost control, with total group operating expenditure increasing in line with inflation at 10.1 per cent." Gcabashe said Eskom would spend up to $6 billion over the next five years to expand infrastructure in response to growth from the mining sector. No decision has been taken on how this will be funded. "This whole area is a priority for us. We are talking about the refurbishment of power stations and strengthening the transmission grid, especially in new mining areas." He said that this was not expected to affect the group's debt to equity ratio, which improved to 0.2 in 2002 from 0.4 in 2001.
Eskom chairman Reuel Khoza said the company saw further opportunities for expansion. "We will diversify our business further and expand our global reach, particularly into Africa. This will not be achieved through organic growth, but through concerted investments." Its investment arm, Eskom Enterprises, would carry these out.
In a separate incident, Eskom lost $16 million in 2002 as a result of a bungled foreign exchange transaction, according to its latest annual report.
Eskom has launched an investigation into the transaction, and is undergoing a comprehensive evaluation of the system and processes involved in foreign exchange transactions.
Eskom spokesman Fani Zulu said that the procurement department secured a forward-cover contract without all the procedures laid down by Eskom having been followed. This resulted in excess forward cover being taken out. "Upon discovering this, the excess cover was cancelled in compliance with our policies and procedures and Reserve Bank requirements. As a result of the strengthening of the Rand towards the end of the year, the cancellation of the forward cover led to the loss of $16 million to Eskom," he said. Eskom would not comment on details of the investigation and the individuals being investigated, saying that could prejudice the outcome of the investigation.
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