Global Power Company of the Year 2001 Proudly South African Minerals and Energy Portfolio Committee...
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Transcript of Global Power Company of the Year 2001 Proudly South African Minerals and Energy Portfolio Committee...
Global Power Company of the Year 2001
Proudly South African
Minerals and
Energy
Portfolio
Committee 19 March 2003
ESKOM HOLDINGS LIMITED
Global Power Company of the Year 2001
Content
Section A Who are we
Section B Long-term trends
Section C Business performance 2002
Section D Financial plan
Section E Budget 2003
ESKOMESKOMWho are we
Section A
EskomStrategic Intent
Eskom will be the pre-eminent African energy
and related services business of global stature.
Values- Integrity - Excellence
- Innovation - Customer satisfaction
Who are we
ESKOM REGULATED• Generation• Transmission• Distribution
ESKOM NON-REGULATED• Engineering• Power business
operations• Primary Energy• Telecoms and
Information Technology
Eskom
General features• Wholly State-owned
• Is the ninth largest electricity utility in the world by sales
• Separate legal entity under Companies Act (previously Electricity Act and
Eskom Act)
• Managed on business principles
• Is financed by net financial market liabilities & investments as well as
reserves
• Supplies approximately 95% of electricity in South Africa and 50% in Africa
• Electricity sales in 2002 were 187 957 GWh
• Internationally, among the lowest cost electricity providers
Industrial electricity prices U
SA c
ents
per
kW
h
0
1
2
3
4
5
6
7
8Ital
y
USA
Ger
man
y
Belgi
um
Den
mar
k
Net
her
lands
Spai
n
UK
Fran
ce
Aust
ralia
Can
ada
Finla
nd
Swed
en
South
Afric
a
Supplied by NUS Consulting Group’s
International Electricity Report April 2002
Sales (GWh)Company Country Sales (TWh)
Rating by sales
RAO-UES Russia 626,8 1EDF France 476,5 2Tepco Electric Power Co. Japan 275,5 3KEPCO South Korea 257,7 4AEP USA 245,0 5E.On Germany 225,7 6RWE Energy AG Germany 209,8 7Enel Italy 206,0 8Eskom South Africa 181,5 9
Source: Data Monitor UK, 2001
General featuresGeneration
•Operates 24 power stations with a nominal capacity of 42 011 MW
•Operates the largest dry cooling power station in the world
•Technical performance at world class standards
•Satisfied a peak demand of 31 621 MW this year
General features
Transmission
•Supports the development of a southern African transmission grid to encourage co-operation and accelerate growth in the region
•Has 26 510 km of transmission lines covering the whole country.
Transmission
Windhoek
Gaborone
Pretoria
Johannesburg
Cape Town
MaputoMbabane
South Africa Swaziland
Lesotho
Namibia
BotswanaZimbabwe
H
H
H
H
P
H
H
T
T
ET
ET
ET ETET
ETETET
ET ET
ET
T
P
N
ET
South African grid superimposed on Europe
3
Madrid
Berlin
General features
Distribution
•Has 298 500 km of distribution and reticulation lines
•Satisfies the electricity needs of 3 417 652 customers
•Has electrified 2,8 million homes since 1991
General featuresEskom Enterprises
•Is the non-regulated subsidiary
•Is the vehicle for expansion into Africa and beyond.
•Presence in Europe, Asia and a substantial presence in Africa
ESKOMESKOMLong-term trends
Section B
Electrification CUMULATIVE NUMBER OF HOMES ELECTRIFIED
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
2,100,000
2,400,000
2,700,000
3,000,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
2.8 million homes electrifi
ed
211 628
Black economic empowerment R’m • Spent R13.3bn
over a five year period
• Spent R197m with women empowered enterprises in 20020
1000
2000
3000
4000
5000
6000
1998 1999 2000 2001 2002
Other Coal
Employment equity (MANAGERIAL AND SUPERVISORY CATEGORIES)
0
10
20
30
40
50
60
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
%54.6
5.2
Gender equity (MANAGERIAL AND SUPERVISORY CATEGORIES)
0
2
4
6
8
10
12
14
16
18
20
22
24
1994 1995 1996 1997 1998 1999 2000 2001 2002
% 24.5
10.4
Real price decreaseTariff increase deflated by average consumer price index
Base = 100 in 1990
Benefit to customer in excess of R72.6
billion
ESKOMBUSINESS PERFORMANCE BUSINESS PERFORMANCE
20022002
Section CSection C
Summary of salient points2002 2001 % Change
Net income before tax (R'bn) 5.5 3.8 45.1%Net income for the year (R'bn) 3.7 2.6 46.0%Opex to revenue 60.2 60.0 -0.4%Return on assets (%) 13.1 11.0 18.7%Cash available from operations (R'bn) 11.8 8.6 37.2%Debt-Equity 0.2 0.4 44.2%Sales volumes (GWh) 187,957 181,511 3.5%
Overview
•Total productivity was positive to the extent of R382m or 1.6%
•First dividend of R549m paid
•Maintained world class technical
performance eg. UAGS better than
international best quartile
•Sustained good environmental
performance with further reductions in
emissions
Overview
•Exceeded the electrification target for the year by 6 257 connections
•Spent R 494m on ongoing skills development and training
•Eskom group procured goods and services to the value of R5.5bn from black economic empowered enterprises
Overview
The group continues to contribute to the fight against HIV/AIDS with other corporates Paid to date R 53m to the development of a vaccine Committed an additional R15m per annum for the
next five years
Focused on continued education and awareness programmes with special focus on voluntary counselling and testing
Treats HIV/AIDS as a focus area
Overview
ESKOMFINANCIAL PLAN 2003-FINANCIAL PLAN 2003-
20072007
Section DSection D
Salient ratios of financial plan
2003 2004
2005 2006
2007
Debt: equity
0.31 0.30 0.21 0.14 0.10
Historic ROA
11.1% 12.4%
13.0%
14.1%
14.2%
Inflation adjusted ROA
1.6% 2.6% 3.2% 3.9% 4.3%
Return on equity
9.2% 11.2%
11.5%
12.7%
12.6%
Income statementRand Million 2003 2004 2005 2006 2007
Revenue 30 561 34 163 37 050 40 984 44 222
Primary energy (7 122) (7 691) (8 387) (9 450) (10 213)
Operating costs (11 775) (12 370) (12 867) (13 510) (14 245)
Depreciation (3 896) (4 413) (5 009) (5 426) (6 112)
Operating income
7 767 9 689 10 787 12 598 13 652
Interest (2 134) (2 222) (2 328) (2 251) (2 229)
Profit before tax 5 633 7 467 8 460 10 347 11 423
Significant investment required into the future
2003 2004 2005 2006 2007
Generation 2 556 3 205 3 115 3 809 4 645
Transmission 1 734 3 670 796 738 688
Distribution 2 432 2 373 2 307 2 645 2 912
Other 2 725 2 943 3 118 4 435 4 342
Total 9 447 12 191
9 336 11 627
12 587
The above figures do not include construction of new power stations
Total capital from 2003 – 2007 = R46.3bn
2002 Rands R’millions
Summary of salient points2003 2004 2005
Sales growth 1.9% 3.4% 2.5%Productivity improvement 1.4% 0.7% 1.1%
Electrification connections 164,107 200,000 200,000 Employment equity > 54.6% > 2003 > 2004Gender equity 24% 26% 30%Black economic empowerment
- % of dicretionary expenditure 44% 50% >50%
Unit capability factor 90.8% 91.0% 91.0%
ESKOMBUDGET 2003BUDGET 2003
Section ESection E
ESKOMHoldings Ltd
2003 2003 BUDGETBUDGET
Summary of salient points2003 Budget
Electrification connections 164,107 Employment equity > 54.6%Gender equity 24%Black economic empowerment (R'm) 5,295
Sales growth 1.9%Producitivity improvement 1.0%Return on assets 11.2%
Net profit before tax (R'm) 5,004 Net profit after tax (R'm) 3,344
Profit before tax and fair value
5,0044,904
3,6083,213
2,062
2,4743,0833,072
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
1996 1997 1998 1999 2000 2001 2002 BUD 2003
ESKOM
Income Income Statement Statement
Budget Budget 20032003
ENTERPRISES
Summary - 20032003 Budget
Employment equity > 50.0%Gender equity 17.0%Black economic empowerment (R'm) 275
Sales growth 15.0%Producitivity improvement 2.3%Return on equity 14.0%
Net profit before tax (R'm) 154 Net profit after tax (R'm) 96
•The budget indicates that the year ahead will be more difficult than the one that has passed
•Consolidation of the businesses will be taking place
Concluding remarks
ESKOM Thank you.