The group’s annual integrated results are available on Eskom’s website at www.eskom.co.za/IR2016 Download our “Eskom results” app for tablets from the Apple and Android app stores Group audited condensed financial results for the year ended 31 March 2016 Condensed group statement of financial position Highlights at 31 March 2016 Restated Revenue increased by 10.5% to R163.4 billion Successful execution of the funding plan – increase of Ingula Units 3 and 4 synchronised during March March 2016 2015 Movement EBITDA increase of 37.4% to R32 billion 123% in liquid assets to R38.7 billion March 2016 Rm Rm % Assets Cash flow from operating activities increased by Medupi Unit 6 in commercial operation since Almost 11 months of no load shedding to July 2016 Property, plant and equipment and intangibles 521 174 458 881 14 36.4% to R37.2 billion 23 August 2015, adding capacity of 720MW Cash and cash equivalents and investment in 38 680 17 359 123 securities Working capital 43 615 35 488 23 Other assets 57 216 46 217 24 Business overview Operating performance Condensed group annual financial information Total assets 660 685 557 945 18 Plant availability improved from a monthly average of 67.84% in April 2015 to 74.21% in During the year, Eskom managed to stabilise the business with improved operational March 2016. As a result, the reliance on OCGTs reduced considerably, with the OCGT Condensed income statement Equity 180 563 117 164 54 and financial performance. With almost 11 months of no load shedding, Eskom will no for the year ended 31 March 2016 Liabilities load factor well below 6% during the last quarter of the year. Debt securities and borrowings 322 658 297 434 8 longer be a constraint to South Africa’s growth by delivering excess electricity capacity. Restated Our plan to 2020/21 aims to re-establish Eskom as a catalyst for growth by delivering Following the success of our maintenance plan (with gross maintenance expenditure March March Working capital 52 360 44 063 19 2016 2015 Movement Other liabilities 105 104 99 284 6 excess electricity capacity. We recognise the need for fundamental operational change constituting 27% of operating expenses), we have delivered on our focus areas for if we are to provide an affordable, sustainable electricity supply to all South Africans. the past year, with no load shedding since 8 August 2015, other than 2 hours and Rm Rm % Total liabilities 480 122 440 781 9 20 minutes on 14 September 2015. Coal stock stood at 58 days at 31 March 2016 Continuing operations Total equity and liabilities 660 685 557 945 19 Financial performance (March 2015: 51 days). A total of 13.6Mt coal was transported by rail (March 2015: Revenue 163 395 147 691 11 Revenue amounted to R163.4 billion (March 2015: R147.7 billion), an increase of 10.5%, Other income 2 390 4 444 (46) 12.6Mt). Condensed group statement of cash flows due to the NERSA-approved price increase in 2015, offset by a marginal reduction in Primary energy (84 728) (83 425) 2 sales volumes. Electricity sales of 214 487GWh were 0.8% lower than the previous year. Net employee benefit expense (29 257) (25 912) 13 for the year ended 31 March 2016 At 31 March 2016, IPP capacity of 3 392MW was available to the system (March 2015: Net impairment loss (1 170) (3 766) (69) Restated 2 606MW). Renewable IPPs achieved an average load factor of 30.7% during the year Primary energy costs of R84.7 billion (March 2015: R83.4 billion) increased marginally by Other expenses (18 663) (15 771) 18 March March (March 2015: 30.9%). Furthermore, we purchased 9 033GWh from IPPs (March 2015: 2016 2015 Movement an average of 1.6%, compared to an average increase of 18.8% over the last five years, Profit before depreciation and amortisation 6 022GWh), at an average cost of 171c/kWh. Rm Rm % reversing a significantly negative trend. Own generation costs of R57.6 billion include 31 967 23 261 37 and net fair value loss (EBITDA) R8.7 billion (March 2015: R9.5 billion) which was spent on diesel for the open-cycle Transmission achieved a best ever reported performance of 2.41 minutes for system Depreciation and amortisation expense (16 531) (14 115) 17 Net cash from operating activities 37 242 27 311 36 gas turbines (OCGTs) to generate 3 936GWh (March 2015: 3 709GWh). Independent minutes lost <1. Although the system average interruption frequency index of Net fair value loss on financial instruments (455) (2 807) (84) Net cash used in investing activities (58 590) (56 386) 4 power producers (IPPs) generated 9 033GWh (March 2015: 6 022GWh) at a cost 20.5 events (March 2015: 19.7) and system average interruption duration index of Net finance cost (7 919) (6 109) 30 Net cash from financing activities 40 927 17 954 128 of R15.1 billion (March 2015: R9.5 billion). Eskom spent R8.1 billion and R3.7 billion Share of profit of equity-accounted investees, Cash and cash equivalents at the beginning of 38.6 hours (March 2015: 36.2) performed better than target, Distribution network 43 49 (12) 8 863 19 676 (55) net of tax the year (March 2015: R8.4 billion and R3.7 billion) on the environmental levy and international performance shows a declining trend. Foreign currency translation 21 24 13 electricity purchases respectively. Profit before tax 7 105 279 – Effect of movements in exchange rates on cash Despite our commitment to safety, we sadly experienced four employee and Income tax (2 488) (37) – 75 284 (74) Business productivity cash savings of R17.5 billion, against a target of R13.4 billion held 13 contractor fatalities during the year (March 2015: three employees and seven Profit for the year from continuing operations 4 617 242 – Cash and cash equivalents transferred to (March 2015: R8.7 billion) have been achieved during the year. contractors). (84) – – Discontinued operations non-current assets held-for-sale The group EBITDA of R32 billion has increased significantly (March 2015: R23.3 billion). Empowerment and CSI Loss for the year from discontinued operations – (42) – Cash and cash equivalents at the end of 28 454 8 863 221 The EBITDA margin improved to 19.77% (March 2015: 15.90%). This is largely due Procurement from B-BBEE compliant suppliers achieved 81.7% of total measured Profit for the year 4 617 200 – the year to revenue growth as a result of the 12.69% standard tariff increase allowed, and procurement spend which included spend with black-owned suppliers of 33.6%. containing cost increases. At 31 March 2016, 61.1% of senior management were black, while 28.1% of senior management were female. Eskom committed R103.6 million to corporate social The group achieved a net profit after tax of R4.6 billion (March 2015: R0.2 billion, investment during the year (March 2015: R115.5 million), impacting 302 736 restated) for the year ended 31 March 2016. beneficiaries (March 2015: 323 882). Eskom electrified 158 016 households during the Group annual financial statements Disclaimer The group annual financial statements have been prepared under the supervision of This announcement does not constitute an offer to sell or an invitation of any offer The group’s net cash inflow from operating activities was R37.2 billion for the year year (March 2015: 159 853). the Group Chief Financial Officer, Mr Anoj Singh CA(SA), and audited by the group’s to buy securities of Eskom Holdings SOC Ltd (Eskom) or any of its subsidiaries in (March 2015: R27.3 billion). Cash flows used in investing activities were R58.6 billion independent auditors, SizweNtsalubaGobodo Inc. The audited annual financial Governance any jurisdiction. Certain statements in this announcement regarding Eskom’s business for the year (March 2015: R56.4 billion). Medupi Power Station’s Unit 6 (720MW) statements of the group, together with the unmodified audit opinion, are available for operations and financial position may constitute forward-looking statements which are Dr Baldwin Ngubane was appointed as Chairman of the Board on 1 October 2015. has been in commercial operation since August 2015. Units 3 and 4 of Ingula Power inspection at Eskom’s registered office and on www.eskom.co.za/IR2016. not intended to be a guarantee of future results but instead constitute Eskom’s current Mr Brian Molefe was appointed as Group Chief Executive and Mr Anoj Singh as Group Station were synchronised on 3 and 25 March 2016 respectively. The construction of expectations based on reasonable assumptions. Actual results could differ materially Chief Financial Officer with effect from 25 September 2015, both being executive The group annual financial statements were approved by the Board of Directors on Medupi Unit 5 has achieved various milestones in support of commercial operation by from those projected in our forward-looking statements due to risks, uncertainties directors. Ms Mariam Cassim and Mr Giovanni Leonardi were appointed as non- 31 May 2016. There were no significant events after the reporting date which impact the first half of 2018, while Kusile continues to achieve set milestones, on the path to these results. and other factors. executive directors on 25 May 2015. Subsequent to year end, Mr Romeo Kumalo and commercial operation of Unit 1 by the second half of 2018. Ms Mariam Cassim resigned as non-executive directors. The group’s liquidity position has improved significantly, with liquid assets increasing by Outlook 123% from R17.4 billion a year ago, to R38.7 billion at 31 March 2016. Eskom Holdings SOC Ltd We will continue with a rigorous programme of planned maintenance without Economic regulation implementing load shedding, while also minimising the use of OCGTs, completing Reg No 2002/015527/30 NERSA allowed Eskom additional revenue of R11.2 billion for the 2016/17 financial year the new build programme, energising our workforce, as well as implementing key Head office in respect of the Regulatory Clearing Account (RCA) application for 2013/14. Eskom safety improvements, operational efficiencies and cost containment measures. This Megawatt Park Maxwell Drive Sunninghill Sandton will apply for RCA adjustments for the 2014/15 and 2015/16 financial years through the will enable Eskom to build the confidence of its stakeholders through short-term PO Box 1091 Johannesburg 2000 performance and sets Eskom on the journey to excess capacity. MYPD methodology. Tel +27 11 800 2775 www.eskom.co.za Eskom will submit an MYPD 4 application by 1 April 2017 at the earliest. HKLM 1113