EEC SALES UP 13%, HIT E2.4 BILLION

MBABANE – EEC has described the financial year ended March 31, 2024, as one of the most difficult years for the company, despite a slightly improved overall financial performance.

During the year under review, the Eswatini Electricity Company (EEC) recorded an increase in its sales growing to E2.451 billion from E2.3 billion recorded in the previous year.
According to the company’s annual report for the year 2023/24 ended March 31, 2024, the increase of 13 per cent was driven mainly by the favourable impact of the tariff increase (9.08 per cent) awarded by the regulator Eswatini Energy Regulatory Authority (ESERA) for the 2023/24 financial year, as well as a 4 per cent growth in sales volumes.  The company closed the year with a profit after tax of E101 million, compared to E83 million in the previous year. This translates to an increase of about 21 per cent.  

The net profit was further boosted by the E62 million tax credit (2023: E67 million), which resulted from the tax computation for the year. The profit after tax line has been trending downward over the past five years, mainly due to the cumulative effect of adverse tariff decisions, while absorbing very high increases from electricity import tariffs. Operating costs remain under strict control, as cost containment measures remain a key survival strategy for the company.

Growth

Sustainable growth in sales remains important to the EEC’s business model and would be critical in enabling the company to recover from the effects of the adverse tariff decisions of the past four years. Electricity units sold during the year stood at 1 173GWh (2023: 1 126 GWh).  The lack of meaningful growth in energy units is indicative of the prevailing sluggish economic condition in the country. The company’s total assets value at the end of the year stood at E6.1 billion; an increase of 7 per cent from last year’s reported position of E5.7 billion. Non-current assets increased by 10 per cent from E4.482 billion to E4.921 billion. The increase in non-current assets is mainly due to the Company’s continued investment in the supply network infrastructure projects.  

The company’s investment in Motraco increased by 3 per cent to E474 million (2023: E462 million). The increase is due to the combined effect of the share of profits and foreign exchange gains recognised during the year, which was partially offset by the dividends received from this investment. Current assets as at March 31, 2024, stood at E1.189 billion (2023: E1.202 billion), which includes cash amounting to E267 million, short-term investments of E98 million, trade receivables of E385 million, and inventories at E125 million. The inability of customers to timeously settle their debts is an indication of the general economic challenges faced by the country.

Government accounts and those of some state-owned enterprises sit with long overdue debts; a situation that adversely impacts the Company’s cash flow. EEC continues to pursue various strategies to ensure the working capital efficiencies of the business. 
Total liabilities show a 17 per cent increase from E1.8 billion to E2.1 billion. The increase is mainly due to additional drawdown from the World Bank loan and rural electrification grants received during the year, which have been recognised under deferred income. 

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