(Bloomberg) -- South Africa experienced respite from power cuts on Saturday as state-owned Eskom Holdings SOC Ltd. said the system had stabilized.
“Improved generation capacity and lower demand” allowed the suspension of rotational blackouts that are implemented to prevent a total collapse of the grid, the utility said in a post on Twitter.
Eskom’s fleet of mainly coal-fired power stations are unreliable and experience frequent breakdowns. Power cuts have occurred this year on 150 days through May, according to data compiled by Bloomberg.
Spar Retailers’ Diesel Bill $35 Million (June 1, 11:57 a.m.)
Food and liquor retailer Spar Group Ltd. estimates its outlets spent more than 700 million rand ($35 million) on diesel to run generators in the six months through March.
Spar’s fuel costs to run generators more than tripled when measured against the prior comparative period, though the amount was “nowhere near” the costs borne its retailers, the company said in a trading statement on Wednesday. While the group’s distribution centers have solar installations that help the company manage energy costs, that’s insufficient to deal with the full impact of so-called loadshedding, Spar said.
“Our retailers have experienced a significant increase in operating costs, primarily driven by the increased cost of diesel required to run generators during the higher levels of loadshedding, coupled with higher repairs and maintenance costs and product wastage, as generators occasionally fail under extended periods of usage,” Spar said. “This had a direct impact on the trading performance and profitability.”
Spar and its retailers are among a growing number of businesses that are being forced to produce their own electricity because state power utility Eskom Holdings SOC Ltd. implements daily blackouts.
Read More: Spar Shares Slump by Record; Sees Drop in Six-Month Earnings (1)
Eskom ‘Encouraged’ by Fitch Ratings Affirmation (June 1, 9:53 a.m.)
The decision by Fitch Ratings Ltd. to affirm Eskom’s long-term local-currency issuer default rating at B, with a stable outlook, is “an encouragement in the cooperative and ongoing efforts” to restore financial stability, improve performance and ensure long-term sustainability, the state-owned utility said.
The affirmation reflects Eskom’s strong links with the government, supported by a debt-relief plan announced in February, Fitch said in a statement on May 30. However, the utility’s standalone credit profile remains weak, as a poor and worsening operating performance offsets improving tariffs and the government’s plan to reduce its debt, the ratings company said.
“Liquidity remains dependent on government support and the spread of Eskom’s debt relief over four years implies any material improvement in financial sustainability will take time to be visible,” Fitch said.
Read More: Eskom Holdings Outlook Remains Stable by Fitch
--With assistance from Rene Vollgraaff.
©2023 Bloomberg L.P.